State of Arizona Project S.L.I.M. report on the Department of Revenue

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STATE OF ARIZONA
PROJECT S. LI. M. REPORT ON THE
DEPARTMENT OF REVENUE
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DEPARTMENT OF REVENUE
PROJECT SUM
TABLE OF CONTENTS
EXEa111VE SlM~ 1
fIECOMMENlATIONS
Comptroller's OffIce - FlnanclaJ S8rvices StaffIng ...........•......................... 19
Micrographics - Income/ Corporate Fles 24
Additional Attorney Position .........................•.................•.. . . . . . . 27
Armored Car Pickup Schedule .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Clerical Support - Taxpayer Information & AssIstance 32
Reassign Quality Control Function to Una Units 36
sates Tax Ucense Enforcement 41
CorpOrate Audit Restrudui6 0 43
Withholding Tax Transfer 49
Quality Control Functions - AD's Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Individual Income Tax Audit 54
Opportunity Cost of Manual Legal Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
DMslon Consolidation ...................................•.................... 72
EXHIBITS
1. SUM Interview Ust - Department of Revenue ( DOR) 13
2. Department of Revenue - Summary of Recommendation TItles and Savings 17
3. Department of Revenue Implementation Schedule 18
4. Present Comptroller's OffIce, 1992 Organizational Structure 22
5. OffIce of the Comptroller, Proposed Organizational Structure ................•....... 23
6. Procurement and Facllties/ Records SectIon. Proposed Organizational Structure 26
7. Caseworker Clerical Support, Present Work RaN Process . . . . . . . . . . . . . . . . . . . . . • . . . . . 34
8. Caseworker Clerical Support, Proposed Work RaN Process .. . . . . . . . . . . . . . . . . . . . . . . . 35
9. Caseworker Quality Control, Present Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10. Caseworker Quality Control, Proposed Process 40
DEPARllENT OF REVENJE
PROJECrSUM
TABU: OF CONTENTS
fXHIBITS
11. Division of Tax Entorcement - Corporate Audit SectIon, Present Organizational Structure ... 47
12. Division of Tax Enforcement - Corporate Audit SectIon, Proposed Organizational Structure . . 48
13. Individual Income Tax Audit SectIon, Present OrganlzatlonaJ Structure ......•........... 57
14. Individual Income Tax Audit SectIon - Present Organizational Structure, Phoenix ...•..... 58
15. Individual Income Tax Audit SectIon - Present Organizational Structure, Tempe ....•..... 59
16. Individual Income Tax Audit SectIon - Present Organizational Structure, Tucson 60
17. Individual Income Tax Audit Section, Present Organizational Structure,
Administrative Support 61
18. Individual Income Tax Audit Section, Proposed Organizational Structure 62
19. Individual Income Tax Audit Section - Proposed Organizational Structure, Phoenix 63
20. Individual Income Tax Audit Section - Proposed Organizational Structure, Tempe 64
21. Individual Income Tax Audit Section - Proposed Organizational Structure. Tucson 65
22. Individual Income Tax Audit Section. Proposed Organizational Structure.
Administrative Support 66
23. Department of Revenue, Present Organizational Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
24. Department of Revenue, Proposed Organizational Structure 81
25. Special Support, Present Organizational Structure 82
26. Special Support, Proposed Organizational Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
27. Administrative Services. Present Organizational Structure 84
28. Administrative Services, Present Organizational Structure ( Functional) . . . . . . . . . . . . . . . . . . 85
29. Administrative Services - Comptroller's Office, Present Organizational Structure 86
30. Administrative ServIces - Records Management, Present Organizational Structure . . . . . . . . . 87
31. Administrative ServIces - Faclltles Management Section, Present Organizational Structure .. 88
32. Administrative ServIces - Estate Tax & FIduciary, Present Organizational Structure 89
33. Administrative Services - Training SectIon, Present Organizational Structure . . . • . . • . . . . . . 90
34. Administrative ServIces - Purchasing SectIon, Present Organizational Structure . . • . . . . . . . . 91
35. Administrative Services DiVIsIon, Proposed Organizational Structure 92
36. Administrative Services Division, Proposed Organizational Structure ( Functional) 93
37. Administrative Services DMslon - Training Section, Proposed Organizational Structure 96
38. Administrative Services DMslon - Hearings OffIce, Proposed Organizational Structure . . . . . . 97
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DEPARTMENT OF REVENUE
PRO. ECT SUM
TABLE OF CONTENTS
EXtIBfTS
39. Administrative Services Division - Bingo Admlnlstratloti,
Proposed Organizational Structure . . . . . . . . . . . . . . • . . . . . . . . . . . . . . . . . . . . . . . . . 98
40. Oversight & Analysis, Present Organizational Structure . . . • . . . . . . . . . . . . . . . . . . . . . . . . . 99
41. Oversight & Analysis, Present Organizational Structure ( Functional) . . . . . . . . . . . . . . . . . . . 100
42. Oversight & Analysis - Community ActIvItIes and Publications Section,
Present Organizational Structure 101
43. Oversight & Analysis - Management Analysis, Present Organizational Structure . . . . . . . . .. 102
44. Oversight & Analysis - Internal Audit/ Criminal Investigations,
Present Organizational Structure 103
45. Oversight & Analysis - Taxation Systems Support, Present Organizational Structure 104
46. Oversight & Analysis - Central Information Services ( CIS),
Present Organizational Structure 105
47. Oversight & Analysis - Hearings OffIce, Present Organizational Structure 106
48. Oversight & Analysis - Bingo Section, Present Organizational Structure 107
49. Oversight & Analysis - Tax Policy Section, Present Organizational Structure .....•...... 108
SO. Oversight & Analysis - Econometrics Section, Present Organizational Structure 109
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July 2,1992
Mr. Paul Waddell
Director
Arizona Department of Revenue
1600 West Monroe
Phoenix, AZ 85007
Dear Mr. Waddell:
We have completed the Governor's Statewide Long- Term Improved Management ( SUM) review
of the Arizona Department of Revenue ( DOR), and are pleased to present to you our report of findings and
recommendations. Our analysis was conducted from March 1992 through May 1992.
This summary describes the objectives of the review, the approaches used throughout the
analysis, and the major changes recommended as a result of the study. We have quantified the potential
benefits and summarized the key Implementation tasks, Including legislative support needed to Implement
proposed recommendations Into actual benefits. Our detailed findings and recommendations follow this
summary.
The total recommendations identify approximately $ 6.4 million In benefits, including $ 6.1 mUlion
in revenue enhancement, and $. 3 million In general savings.
OBJECIJYES AND GOALS
The overall objective of this study was to find ways to Improve the delivery of services In DOR.
using various business analysis and Total Quality Management ( TQM) techniques. Our goal was to
streamline processes and unnecessary work, Improve systems and procedures. and realign groups with
slmlar functions to deliver services more effectively at a lower cost
We approached this study by taking an Integrated view of the organization. For each area, we
reviewed the mission and strategic focus; product/ process delivery methodology; process technology;
Mr. Paul Waddell, Director
Department of Revenue
Page 2
methods for USIng and managing Information; performance measurements; quality service Issues and
measurements; organizational structures; and the logistics and physical assets used by the organization to
deliver products and services.
We began by using the shelf data provided to us by DOR to become famliar with the mission,
size, structure, and responslbHlt1es of the major areas of the Agency. We conducted IntervIeWs with all levels
of supervision and select technical and line personnel to enable us to focus on areas which could be
Improved. Where appropriate. we used Interviews to develop detaled process flows which enabled us to
identify non- value added elements that could be eliminated. During the course of our review, we conducted
over 135 Interviews of Agency and external personnel ( see exhibit 1, SUM Interview Ust - DOR).
In addition to developing process flows. we employed the following analytical techniques:
• Quantification of cost to provide a quality service or product where It appeared the cost
could be reduced
• Identification of prevention activities ( upstream) to reduce more costly faUures further in the
process ( downstream)
• Assessment of the organizational structure Including consideration of the following issues:
Span of control
Managerial layering
Alignment of missions
Distribution of responslbUlties
Fragmentation of duties
Overlapping or redundant functions.
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Mr. Paul Waddell, Director
Department of Revenue
Page 3
Our first step In analyzing the organization Involved Identtfylng opportunities for streamlining
processes and modifying practices to Improve performance provided by the various units. Once this
streamlining was completed, we reviewed the remaining units to assess their organizationai placement and
structure. Finally, organizational changes are proposed to achieve alignment of missions; appropriate spans
of control; reduced layering to achieve organizational ftexlbllty and empowerment at the lower layers of the
organization; and elimination of duplicative and fragmented duties.
In order to quantify the effects of making changes, we obtained time estimates for work
requirements. In addition, we used Agency avalable statistics to assess the variety and volume of
transactions processed by an area.
As recommendations were developed, we reviewed the proposed changes with appropriate
supervisors and managers to determine completeness of the analysis. In · addition, we met with senior
Agency management to review our findings on a regular basis.
SUMMARY FINDINGS & RECOMMENDATIONS
Potential opportunities for Increasing revenues and effecting cost savings can be realized by
streamlining various processes, and modifying procedures and approaches to conducting business.
Additional savings can be achieved by reorganizing the units to align missions; reduce duplicative efforts;
develop appropriate spans of control; and reduce layering. exhibit 2, Summary of Recommendation, Titles
and Savings, shows the summary of savings for each of the analyses performed.
Opportunities for Revenye Enhancement
Approximately one- half of our recommendations relate to opportunities for enhancing revenues.
These recommendations are entitled as follows:
• Additional Attorney Position
• Sales Tax Ucense Enforcement
Mr. Paul Waddell, Director
Department of Revenue
Page 4
• Corporate Audit Restructure
• WIthholding Tax Transfer
• Quality Control Functions - AD's OffIce
• IndMduallncome Tax Audit
• We believe establishing another OCR Attorney Position In the Attorney General's office will
enable the Agency to recover up to $ 1.98 mUlion In the current case backlog for an
investment of $ 55 thousand, per year
• The Sales Tax Ucense Enforcement recommendation Increases the number of sales tax
license positions by three. enabling those positions to bring on- line potential licensees. This
should result in annual net revenue enhancements of approximately $ 280 thousand
• Under Corporate Audit Restructure. through the reclassification and/ or establishment of new
positions, a greater audit capacity Is created so as to result In Increased revenues. The
projected revenue enhancement has been estimated at $ 1.95 mUlion
• The transfer of the Withholding Tax program to the Department of Economic
Security/ Unemployment Insurance frees up two Field Auditors · enabling them to work on
income production In the Sales and Corporate Audit sections. This wli resutt in increased
revenues of approximately $ no thousand
• Restructuring the Quality AssUrance function in the Tax Enfprcemem Assistant Director's
Q: f!!. Qi wli resutt In the freeing up of one Revenue Field Auditor position. This position when
reassigned to Sales Audit should generate some $ 420 thousand a year In collections
• Establishing four additional units frees up two Revenue Auditor positions enabling the
Individual Income Tax Audit section to realize an average $ 353 thousand In collections per
auditor ( per current statistics) for a total of $. 7 mUlion.
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Mr. Paul Waddell, Director
Department of Revenue
PageS
In all, these revenue enhancing recommendations wli resUt In an additional $ 6.1 mliion dollars
being realized by the Department of Revenue for the State of ArIzona.
Division Consolidation
It is our understanding that the DMslon of Oversight & Analysis has been In existence less than
two years. The sections and units reporting to It previously were disbursed among several other dMsions
and areas within DOR.
In our opinion, the creation of a separate dMslon to house these diverse functions is not justified
from eitheran organizational or cost/ benefit stand- point. We recommend redistributing the various functions
among the Administrative Services, and Taxpayer Support Divisions as well as the Deputy Director's Office.
This recommendation results In the elimination of one Assistant Director position, one
Manager/ Supervisor position and two Executive Assistant positions and pertains to organizational alignment
and not to personnel placement.
The recommendation will result In an annual savings of $ 174,000.
OpPOrtynlty Cost - Lega! Research
Several sections within DOR are required to conduct research, analysis and Interprstatlon of
existing State tax laws. At present, this research Involves prlmarly manual Investigation off- site at various
libraries or via electronic research facllties avalable at ArIzona State University and the CapItol Ubrary.
We recommend that DOR acquire Tax Law Ubrary software on compact disk and InstaJIIt on one
or more local area networks ( LAN) within the Department. The software is avalable for lease for under
$ 3000! year; the one- time cost of the Compact Disk Is $ 600.
We have estimated that some 16,008 hours are spent annually In the research, analysis and
Interpretative functions. Assuming that one- half of this amount represents the research function, and
Mr. Paul Waddell, Director
Department of Revenue
Page 6
reeI& zIng that a large percentage of this time can be reinvested to I' 88lIze benefits In Increesed productivity,
we estimate an annual opportunity savings to the Department of $ 47,000. Factoring In the software and
hardware expenditures, this nets out to $ 45,000! year In savings.
ComDlrolIe( s OffIce - Financial SeryIces StaffIng
The ratio of supervisors to staff In the Financial ServIce Unit Is high. The reconcIlation area has
a ratio of 1: 3; the expenditure area has a ratio of 1: 4; the checks/ warrants and surplus property areas have
a ratio of 1: 2. Additionally, a ratio of 1: 2 supervisor/ supervisor exists for the unit overall.
We recommend revising the organizational structure of the Financial Services Unit In the
Comptroller's OffIce and eliminating one of the two second level supervisors.
Consolidation of revenue and expenditures functions under one supervisor will result In the
elimination of one Fiscal Services Specialist for a savings of $ 30 thousand/ year.
MicrograPhics - Income/ Corporate FUes
The Records Management Section within the Administrative Services DMsIon Includes three
sections: Micrographics, Income and Corporate Flss, and the Warehouse. Two of the three sections have
closely aligned functions. Both are small and each has Its own supervisor. The Micrographics unit Is staffed
by a supervisor and two leads.
In effect, there are four positions contributing to the supervision of seven full- time and two part­time
employees.
We recommend eliminating one of the two Administrative Support Supervisors and merging the
Micrographics and Income/ Corporate Fles sections. The resUtlng unit would have seven line employees
of which two would be leads assisting In work scheduling and monitoring, and one supervisor.
Cost savings associated with this consolidation amount to $ 26 thousand/ year.
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Mr. Paul Waddell, Director
Department of Revenue
Page 7
Clerical Support - Taxpayer Information & Assistance
Clerical assistance within the Taxpayer Information and AssIstance Section Is rendered through
a separate clerical unit headed by an Administrative Support Supervisor.
We recommend reassigning those clerical unit employees who handle casework typing and
document pulls to the case work units coordinating the research and generating the typewritten work. The
remaining Individuals who are Involved In receptionist duties should be assigned to either of the unit
supervisors or the section administrator.
This would result In the elimination of the Clerical Unit Supervisor for an annual savings of
$ 26.538. It would also establish quality control at the lowest possible level and a point closest to the
originating case research. All elements of the case, Including basic research, documents reviewed. action
taken, and correspondence developed will be under the control of the case work unit supervisor.
Reassign Quality Control Function to Une Units
WIthin the Taxpayer Information and AssIstance Section Is a two person quality control unit
reporting to the Section Manager. The quality control of the work of the section could be improved by
having this function performed by the sub unit where the work originates.
We recommend eliminating the quality control unit and realigning the quality control functions
currently administered by the Q. C. unit with the first level case worker supervisor, and as required to the two
Business and Income Unit managers.
elimination of the quality control unit wli result In annual savings of $ 49,752.
Armored Car Pickup Schedule
An opportunity exists to accelerate the deposit of revenue received each day by DOR In
connection with Income Tax retums. The Treasurer's OffIce has advised us that the availability of these
additional deposits would help improve cash flow at critical periods In the year.
SUMMARY OF SAYINGS
We recommend the State Treasurer's OffIce negotiate for a later ( 4: 30 pm) pickup by the
depositary bank. We have been advised that they can accept deposits up to 6: 00 pm.
Mr. Paul Waddell, Director
Department of Revenue
Page 8
exhibit 2, DOR Summary of Recommendation Titles and Savings, ouUlnes the Impact of each of
the recommendations and reflects savings resulting from revenue enhancement and general savings. The
magnitude of each Is as follO\ NS:
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$ 6,418.734
$ 6,186,000
369.049
$ 6,555,049
- 136.315
Revenue Enhancement
General SavIngs
Total
Less Annual Recurring Costs
Net Savings
No savings figures have been associated with this recommendation as the main benefit lies In
having additional deposits available to the State Treasurer each day. This Is partlculal1y Important during
the AprIl and May time periods when large expenditures for School AId become due.
At present, a eut. off time of 2: 00 pm has been established for Remittance PrOC888lng to submit
Its final transmittal of the day of receipts to the Comptroller's OffIce. This early eut- off Is required In order
for the Comptroller to have sufficient time to prepare the Cash Letter and accompanying deposit documents
for the depositary bank.
The Improved services and benefits ouUlned above are achieved through the 13 recommendations
discussed In this report The recommendations apply to several areas such as organizational restructuring,
process changes, revenue enhancement, management controls, funetionaJ realignment and staffing
requirements.
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Mr. Paul Waddell, Director
Department of Revenue
Page 9
OTHER ISSUES
Other miscellaneous areas of opportunity for Agency Improvements, not addressed because of the
limited duration of review, are as follows:
• CorPorate Tax - Further automation of this area appears warranted. We noted that there are
three generations of lap- top computers In use throughout the unit. A number of these are
unable to utilize the standard MicroSoft Version 5.5 Word Processing software. This unit needs
a policy manual as well as formalized training tor Its staff.
• Warehouse - Administrative Services Informed us that they are running out of storage space In
their present warehouse. We recommend that DaR enter Into discussions with AHCCCS
Management to explore using their warehouse. Most, If not all, of their current warehouse space
should become available within the next year. This warehouse Is much larger than DaR's; the
lease costs AHCCCS Is currently paying per square foot of storage Is SUbstantially less than
DaR's present costs.
• Phone System - The DaR telephone system Is limited but the situation on the 5th floor Is very
bad. The telephones ring excessively before a response and then the caller Is likely to be put
on hold. This generates poor public relations.
• Sales Tax - This appears to be an overly complex system; one which does not promote
compliance.
• Policyaralning Loop - There Is a need to establish In all audit areas, a formal method for
translating audit decisions ( Informal and formal) Into policy and training programs.
• Quality Control - The supervisors In the various audit areas should increase their activities as an
ongoing and Integral part of quality control activities.
• Informal Hearings and Protests - There are hearings and protest units or aetlvltles housed in
each of the audit sections. These are currently being revieWed by DaR for possible merging
Mr. Pau Waddell, Director
Department of Revenue
Page 10
Into a single unit. There are economies of scale as well as the possIbUlty of freeing auditors for
audit work.
• IndMdua! Audit - As noted In one of our earlier recommendations, the clerical situation needs
to be closely reviewed for reorganization. It could be decentralized to the audit units or
restructured to reftect a small centralized unit with some decentralization.
• Training - Efforts to combine training classes across agencies through the coordinating auspices
of the DOATraining Unit should be encouraged. Also, opportunities for pooling related services,
such as audio/ video production services and other Instructional media, as well as Instructors
themselves, should be further explored.
• Pybllcatlons - The Department of Commerce publishes a " Guide to Establishing a Small
Business" which includes a chapter entitled " Ucenslng Requirements for Selected Businesses
and Professions." Information in this chapter Is collected and published ( per statute) by the
Department of Revenue. The Information Is collected by DOR via surveys of various state
agencies to determine their licensing requirements. Since two state agencies are duplicating
the same published Information, and the " Guide" undoubtedly has the potential for wider
distribution, It may be appropriate to shift the legislative authority for publication to the
Department of Commerce.
• Job TltJes/ ResoonsibUlties - Disparity frequently exists between actual job responsibilities and
the duties as listed In the job/ grade specifications.
IMPLEMENTATION
Implementation Is the critical step In the process of achieving savings. Potential savings are often
identified but not achieved when the Implementation process Is distracted by day- to- day activities, and
managers shy away from the necessary reduction In staff. Successtullmplementations are marked by two
things: ( 1) a strong commitment from senior management to achieve as much of the savings as proves
possible; and ( 2) designation of implementation team leaders with the mental toughness to see the task
through to completion.
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Mr. Paul Waddell, Director
Department of Revenue
Page 11
The implementation process is best carried out soon after the review process. This maintains
momentum whRe the topics are fresh In people's minds. We estimate that most of the recommendations
contained in the report can be Implemented within a period of twelve months. Some recommendations.
hoINever, may require additional time as they are dependent upon leglslatlve approval.
Our recommended Implementation Plan in Exhibit 3, DOR Implementation SChedule, outlines an
Implementation sequence and approximate duration for each recommendation. A detaled plan wli be
established at the outset of the Implementation. Indlvklual recommendation and Implementation
requirements are included with the recommendations in the detaUect section of this report.
* * * * *
Mr. Pa~ Waddell, Director
Department of Revenue
Page 12
We wish to thank you and your entire staff for their complete cooperation and support of our
efforts during this study.
We appreciate the opportunity to be of service to the Governor and the SUM Steering
Committee In this endeavor. Should you have any questions regarding this report please feel free to contact
the Project executive or any member of your Project SUM Team:
• James GrIfflth, Department of Economic Security
• Carl Jager, Department of Transportation
• Phyllis Knox, Department of Health Services
• Thomas Donahue, Coopers & Lybrand
David St. John
Executive Director
Project SUM
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SLIM INTERVIEW LIST
DEPARTMENT OF REVENUE ( DOR)
.
Date: Apr 20 - lOam
Name Title Date Time Interviewer
Kickoff Meeting NA Mar. 5.92 10: 00am Team
Confid. Training NA Mar. 6.92 8: 00am Team
P. Waddell Director Mar. 9.92 10: 00am Team
R. Serino AD, Data Management Mar. 10,92 3: 00pm Team
R. Milanese AD, Taxpayer Support Mar. 11,92 8: 15am Team
J. McVey AD, Propty Valuation Mar. 11.92 1: 00pm Team
H. Scott AD. Oversight & Analysis Mar. 11,92 2: 30pm Team
k. Behringer Deputy Director Mar. 12.92 10: 00am Team
J. Timko AD. Administrative Services Mar. 12,92 1: 30pm Team
S. Shillrin AD, Tax Enforcement Mar. 12.92 3: 00pm Team
D. McCuin Corporate Income Tax Admin. Mar. 16,92 1: 00pm Griffith
A. Arant- Cousins Exec. Asst. Tax Enforcement Mar. 16.92 10: 00am Griffith
M. Metko Purchasing Manager Mar. 16.92 2: 30pm JagerlKnox
R. Cobbin Records Management Supervisor Mar. 16.92 8: 30am Jager/ Knox
G. Sailors Admin. Services Officer IV Mar. 16.92 10: 00am Jager/ Knox
L. Gantz EDP Programmer Analyst III Mar. 16.92 1: 30pm Jager/ Knox
J. Postal Trans. Privilege Tax Admin. Mar. 16,92 2: 30pm Griffith
J. Norris Collections Administrator Mar. 16.92 4: 00pm Griffith
R. Robinson Indiv. Income Tax Administrator Mar. 16.92 8: 30am Griffith
B. Pipkin Administrative Asst. III Mar. 17,92 10: 00am Jager/ Knox
P. Dunbar Training Administrator Mar. 17.92 1: 30pm Jager/ Knox
A. Moss Revenue Supervisor III Mar. 17,92 2: 30pm Griffith
J. Ward Administrative Support Supvr. Mar. 17,92 8: 30am Jager/ Knox
D. Barnes Information Center Mgr. Mar. 17.92 3: 00pm Donahue
K. Kichler Sys. & Programming Mgr. Mar. 17.92 1: 30pm Donahue
G. Shagena Computer Operations Mgr. Mar. 17,92 8: 30am Donahue
C. Anthony Rev. Field Auditor II Mar. 18.92 1: 30pm Griffith
L. Prins Administrator Mar. 18.92 3: 30pm Knox
M. Reyes Admin. Supervisor Mar. 18.92 1: 00pm Jager
E. Leyba Administrator Mar. 18.92 8: 30am Donahue
J. Russell Property Appraiser IV Mar. 18.92 1: 30pm Donahue
M. Finley Admin. Systems Supvr I Mar. 18.92 2: 00pm Jager
W. Nowiin Property Appraiser Mar. 18.92 3: 00pm Knox
D. Hesselgrave Examiner Tech I Mar. 18,92 3: 00pm Knox
M. Lewis Clerk Typist III Mar. 18.92 1: 00pm Knox
S. Franzman Admin. Svcs. Officer IV Mar. 18.92 3: 00pm Knox
B. Beion Manager Mar. 18.92 3: 00om Donahue
page 1
DCR · 13
EXHIBIT 1
PAGE 1 OF 4 PAGES
EXHIBIT 1 I PAGE 2 OF 4 PAGE
SLIM INTERVIEW LIST
DEPARTMENT OF REVENUE ( DOR)
Date: Apr 20 - 10am
Name Title Date Time Interviewer
C. Hudak Rev. Field Audiotr !" Mar. 18.92 10: 30am Griffith
V. Wright Rev. Field Auditor n Mar. 19.92 9: 30am Griffith
T. SChlosser Prog. & Proj. Spec. II Mar. 19.92 8: 30am Griffith
M. Bacon Fiscal Services Spec. II Mar. 19.92 1: 30pm Knox
G. Nichols Faciliities Supervisor Mar. 19,92 9: 30am Jager
M. Finley Admin. Systems Supvr I Mar. 19,92 3: 00pm Jager
T. McGinnis Rev. Field Auditor II Mar. 19,92 10: 30am Griffith
L Stakes Fiscal Services Sys. Analyst Mar. 19.92 4: 00pm Knox
L Montgomery Fiscal Services Spec. II Mar. 19.92 9: 00am Knox
Y. Hopkins Clerk Typist Mar. 1S, S2 : 9: 30am Jager
S. Noyes Fiscal Services Spec. II Mar. 1S. 92 10: 30am Knox
W. Kusnerz Systems Engineering Mgr. Mar. 19,92 8: 30am Donahue
I. Hardin Fiscal Services Spec. IV Mar. 1S, S2 2: 30pm Knox
S. Flores Forms Analyst III Mar. 20,92 2: 00pm Knox
T. Stitt Buyers Assistant Mar. 20,92 3: 00pm Knox
L Gasper Admin. Assistant III Mar. 20,92 S: OOam Knox
J. Secket Clerk Typist Mar. 20,92 9: 45am Jager
J. Peters Collection Suovr I Mar. 20.92 10: 00am Griffith
T. Simmons Collection Supvr II Mar. 20, S2 3: 00pm Griffith
S. Shiffrin Assistant Director Mar. 20, S2 1: 00pm Griffith
L. Byrd Warehouse Worker Mar. 20. S2 9: 00am Jager
F. Caruso Collection Supvr. II Mar. 20.92 8: 30am Griffith
N. Buta Collection Supvr I Mar. 20.92 1: 30pm Griffith
C. Dicken ! EDP Sys Proj Mgr I Mar. 23.92 11: 00am Donahue
B. Marte Collector II Mar. 23.92 10: 00am Griffith
F. Medina Collection Supvr II Mar. 23,92 3: 00pm Griffith
K Riley Admin. Asst. II Mar. 23.92 8: 30am Griffith
V. Moore Collection Supvr II Mar. 23.92 1: 30pm Griffith
A. Cerelia EDP Sys Proj Mgr I Mar. 23.92 10: 00am Donahue
G. O'Neal Management Analyst III Mar. 24,92 3: 00pm Knox
E. Pullian Rev. Field Auditor II Mar. 24,92 1: 30pm Griffith
K Vere Admin. Supp. SVC5 I Mar. 24.92 11: 00am Donahue
J. Timko Assistant Director Mar. 24,92 1: 00pm Donahue
R. Valles Admin. Services Officer II Mar. 24,92 10: 30am Donahue
N. Miller Admin. Services Officer I Mar. 24.92 10: 00am Donahue
V. SonSui Admin. Supp. Svcs I Mar. 24.92 10: 00am Donahue
G. Sailors Comptroller Mar. 24.92 11: 30am Knox
P. Waddell Director Mar. 24,92 3: 30pm Donahue
R. Petrenka Deputy Treasurer Mar. 24.92 2: 00pm Donahue
B. Ward Administrator Mar. 24,92 8: 30am Knox
page 2
DOR - 14
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EXHIBIT 1
PAGE 3 OF 4 PAGES
SLIM INTERVIEW LIST
DEPARTMENT OF REVENUE ( DOR)
Date: Apr 20 - 10am
Name Title Date Time Interviewer
D. Brewer Admin. Supp. Svcs I Mar. 24.92 9: 00am Donahue
K Abramsohn Chief Hearing Officer Mar. 24.92 10: 00am Knox
N. Green Admin. Services Officer I Mar. 24,92 11: 00am Donahue
K Vere Admin. Supp. Svcs I Mar. 24.92 11: 00am Donahue
G. Meyers Administrator Mar. 24.92 1: 30pm Knox
M. Stacey Rev. Field Auditor Sup. I Mar. 24,92 3: 00pm Griffith
D. Fredenburg Admin. Svcs. Officer IV Mar. 25,92 1: 30pm Knox
K Abramsohn Chief Hearing Officer Mar. 25,92 8: 30am Knox
S. Silver Rev. Field Auditor III Mar. 25,92 3: 00pm Griffith
D. Plaughman Rev. Field Auditor II Mar. 25.92 1: 30pm Griffith
V. Penez Rev. Field Auditor II Mar. 25.92 10: 00am Griffith
R. Petrenka Deputy State Treasurer Mar. 25,92 2: 00pm Donahue
R. Gaddis Rev. Field Auditor II Mar. 25,92 8: 30am Griffith
E. Snow Management Analyst III Mar. 25,92 3: 00pm Knox
D. Fredenburg Administrative Svcs Officer Mar. 25,92 1: 30pm Knox
D. Walth Administrator Mar. 25.92 10: 00am Knox
D. Alcorn Rev. Field Auditor III Mar. 26.92 1: 30pm Griffith
A. Garcia Rev. Field Auditor Sup III Mar. 26,92 10: 00am Griffith
J. Wallen Management Analyst III Mar. 26,92 8: 30am Knox
K McQuiity Rev. Auditor III Mar. 26,92 8: 30am Griffith
M. Polashek Rev. Field Auditor II Mar. 26.92 3: 00pm Griffith
W. Molina Clerk Typist 111 Mar. 27,92 10: 00am Griffith
B. Brion Field Collector II Mar. 27,92 1: 30pm Griffith
B. Rivera Exam Technician II Mar. 27,92 8: 30am Griffith
D. Muccilli Compliance Manager Mar. 30,92 9: 00am Jager
K Latella Supervisor Mar. 31.92 11: 30am Jager
P. Waddell Director Mar. 31.92 3: 30pm Team
C. Olson Supervisor Mar. 31.92 10: 30am Jager
A. Severance Property Appraiser IV Mar. 31.92 1: 30 Knox
J. Timko Assistant Director Mar. 31.92 9: 00am Team
C. Murray- Leyba Admin. Svcs. Officer IV Mar. 31.92 10: 30am Knox
B. Belon Manager Apr. 1.92 10: 30am Donahue
J. Russell Property Appraiser IV Apr. 1.92 8: 30am Donahue
G. Sailors Comptroller Apr. 1,92 3: 00pm Donahue
W. Nowlin Property Appraiser/ Fin. Analyst Apr. 1.92 1: 30pm Donahue
V. Weiss Clerk Typist III Apr. 2.92 2: 00pm Jager
L. Kishbaugh Supervisor Apr. 2.92 3: 00pm Jager
W. Eichelberger Supervisor Apr. 2.92 9: 00am Jager
E. Leyba Administrator Apr. 2.92 10: 30am Donahue
D. Wickersham , Manaoer Aor. 2.92 10: 30am Jager
page 3
OOR - 15
EXHIBIT 1
PAGE 4 OF 4 PAGES
SLIM INTERVIEW LIST
DEPARTMENT OF REVENUE ( DOR)
Date: Apr 20 - 10am
Name Title Date Time Interviewer
L Prins Administrator Apr. 2.92 8: 30am Donahue
S. Franzman Admin. Svcs. Officer IV Apr. 3.92 8: 30am Donahue
R. Gustafson Admin. SIICS. Officer IV Apr. 3.92 1: 30pm Knox
R. Jackson Property Appraiser IV Apr. 3.92 10: 30am Knox
S. Barney Property Appraiser IV Apr. 3.92 3: 30pm Knox
D. McCuin Administrator Apr. 3.92 8: 30am Griffith
T. MacConnell Fiscal Svcs. Unit Supervisor Apr. 6,92 9: 00am Knox
G. Shagena EDP Camp. Opns. Mgr II Apr. i, 92 9: 00am Donahue
J. Norris Administrator Apr. 7,92 11: 00am Griffith
R. Serino Assistant Director Apr. 7,92 9: 00am Donahue
K Abramsohn Chief Hearing Officer Apr. 7.92 1: 30pm Knox
S. Shiffrin Assistant Director Apr. 10,92 9: 00am Griffith
R. Milanese Assistant Director Apr. 14,92 3: 00pm Donahue/ Jager
P. Waddell Director Apr. 1S. 92 3: 00pm Donahue
J. Timko Assistant Director Apr. 1S, 92 9: 00am Donahue! Jager
page 4
DOR - 16
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DEPARTMENT OF REVENUE
SUMMARY OF RECOMMENDATION TITLES AND SAVINGS Total Budget: $ 49,467,000 Total FTE Positions: 1277.8
EXHIBIT 2
June II, 1992
~,
....
......
ANNUAL RECURRING BENEFITS FTE System Law Estimated Recurring One- Time
Net General Revenue Changes Changes Months to Costs To Costs To
Recommendation Titles Benefits Savings Enhance. REDUCTIONS ADDITIONS Requi red Required Complete Implement Implement
,. Comptroller's Office- Financial Svcs Staffing $ 30.600 $ 30,600 1 6 months
2. Micrographics- Income/ Corporate Fi les $ 26,538 $ 26,538 1 6 months
3. Additional Attorney Position $ 1,925,000 $ 1,980,000 1 6 months $ 55,000
4. Armored Car Pickup Schedule $ 0 completed
5. Clerical Support- Taxpayer Info. & Assistance $ 26,538 $ 26,538 1 6 months
6. Reassign OIC Furction to Line Units $ 49,752 $ 49,752 2 6 months
7. Sales Tax License Enforcement $ 280,480 $ 360,000 3 12 months $ 79.520 $ 25,500
8. Corporate Audit Restructure $ 1,958,865 $ 8,865 $ 1,950,000 2 12 months $ 25,000
yes
9. Withholding Tax Transfer $ 770,000 $ 770,000 see note 1 18 months
10. OIC Functions- AD's Office $ 420,000 $ 420,000 3 months
11. Individual Income Tax Audit $ 710,711 $ 4,711 $ 706.000 1 6 months $ 25,000
Note 2
12. Opportunity Cost of Manual Legal Research $ 45,740 $ 47,535 1 3 months $ 1,795 $ 600
13. Divis on Consol idation $ 174,510 $ 174,510 4 3 months
TOTALS: $ 6,418,734 $ 369,049 $ 6,186,000 11 6 $ 136,315 $ 76,100
NET FTE SAVINGS: 5
Notes: 1. Leglsl~ tion required to move Withholding function to Department of Economic Security.
2. Cost a~ oidance through el imination of one vacant position.
DEPARTMENT OF REVENUE IMPLEMENTATION SCHEDULE
( PRELIMINARY) EXHIBIT 3
I MONTHS
TITLE I 1 I 2 I 3 I ~ I 5 I 6 I 7 I 8 I 9 I 10 111 I 12 I 13 I 14 I 15 I 16 I 17 118 I 19 I 20 I I
I I I I I I. COMPTROLLER'S OFFICE - FINANCIAL SERVICES STAFFING I
I I I I I 2. MICROGRAPHICS - INCOMEICORPORATE FILES I
I I I I I 3. ADDITIONAL ATTORNEY POSITION I
4. ARMORED CAR PICKUP SCHEDULE - I 1 I I I 5. CLERICAL SUPPORT - TAXPAYER INFORMATION & ASSISTANCE I
I I I I I 6. REASSIGN Q/ C FUNCTION TO LINE UNITS I
I I I I I 7. SALES TAX LICENSE ENFORCEMENT I
I I I I I I I I I I I a. CORPORATE AUDIT RESTRUCTURE I
I I I I I I I I I I I
9. WITHHOLDING TAX TRANSFER I
I I II I I 1•. Q/ C FUNCTIONS - AD'S OFFICE
I I II. INDIVIDUAL INCOME TAX AUDIT I
I I 12. OPPORTUNITY COST OF MANUAL LEGAL RESEARCH I I I 13. DIVISION CONSOLIDATION •
DORIMP
8 : D ... ClI: l
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CQUPTROII fA'S OFFICE - ANANCIAL SERVICES STAFFING
The Comptroller's office Is located within the DtvIsIon of Administrative ServIces. Key strategic
business functions are divided among four office units. These office units Include Financial Control,
Support/ Payroll, Special Tax, and Financial ServIces.
Financial Serylces Unit
The Financial Services Unit Is the core of financial accounting functions. The unit Is responsible for
handling DOR accounting functions including the reconcUlatlon of all DOR revenue; arranging and
processing DOR travel claims; and Interfacing with commercial banks on deposits, returned warrants and
foreign checks. Financial Service Unit personnel are currently divided into reconcHlatlon or expenditure
related functions and activities.
The spans of supervisory control In the Financial Services Unit Is narrow, and Is comprised of 12
FTE positions with the following supervisor/ employee ratios:
• A 1: 3 sypervisorlemoloyee ratio exists in the feconcUlatlon area. The Fiscal Service
Specialist III supervises all reconcUlatlon functions and activities, completes the Fund
Status Summary Report, processes Purchasing charge- backs for non- paper supplies
and develops operating procedures. The FIscal Service Specialist III directly supervises
two Fiscal Service Specialist II positions which are responsible for reconcUlng sales tax
revenues and the expenditure ledger of the ArIzona Financial Information System ( AFIS)
and handling revolving funds and bank statements; and one Account Technician II
position which Is responsible for handling reconcHlatlon of non- sales tax revenue such
as special, Income/ corporate and withholding taxes
DOR - 19
• A 1: 4 supervisor/ emPloyee ratio exists In the 8XP8Oditure area. The Fiscal Services Specialist
II supervises expenditure related functions and activities which Includes processing accounts
payable claims. completing the expenditure areas of the Fund Status Summary Report. handling
expenditures for all DOR Divisions and developing operating procedures. The Fiscal Service
Specialist II position directly supervises one Account Technician III position which Is responsible
for handling travel and accounts payable claims; and three Account Technician II positions
which are responsible for reconcIlng generaJ fixed assets and processing paperwork for the
Division
• A 1: 2 supervisor/ emDlovee ratio exists In the FloancJa! Services Unit. The Fiscal Service Unit
Supervisor manages and supervises the Financial Services Unit and Interfaces with all
Comptroller personnel. The Fiscal Service Unit Supervisor directly supervises one Account
Technician II position which Is responsible for handling foreign checks and returned warrants.
and coordinates bank deposits; and one Account Technician III position which Is responsible
for coordinating sUrplus property procedures and the Inventory of all DOR assets which are
reconcUed with accounting data
e A 1: 2 SUOOI"'.. n. sorIsuD8l"' lisor ratio sx! sts In the Flnanc! a! Ser..' ice Unit. In addition to the two
positions In the preceding paragraph. the Fiscal Service Unit Supervisor directly supervises two
supervisors. one Fiscal Service Specialist III and one Fiscal Service Specialist II ( see Exhibit 4,
Comptroller's OffIce ( FInancial Services Unit), Present Organizational Structure).
The organizational structure In the Financial Services Unit results In an Inefficient use of supervisory
personnel and unnecessary duplication. This duplication Is manifested In two supervisory levels detailed In
the previous section. Each of the designated supervisory personnel are spending more than 50% of their
time performing tasks other than supervision. There are three working supervisors within the Financial
Services Unit. Supervisory tasks could be consolidated and the supervisory ratio expanded with limited
Impact as Financial Services Unit personnel are cross- trained.
We recommend revising the organizational structure of the Financial Services Unit In the
Comptroller's OffIce and eliminating one of the two supervising Fiscal Services Specialists. The remaining
DOR - 20
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Fiscal Services Specialist will supervise both revenue and expenditure functions within the Financial Services
Unit ( see Exhibit 5, Comptroller's OffIce, Proposed Organizational Structure ( FInancial services Unit).
• Financial ServIces Unit personnel are cross- traIned and can be supervised by one
supervisor.
• Con8oIldation of revenue and expenditures functions wli eliminate the need for two
supervisors reporting to the FIscal Services Unit Supervtsor. The elimination of one
Fiscal Services Specialist II wli reduce $ 30,600 In salary and ERE costs per year.
• Total Savings = $ 30,600
• Address Personnel reductions through reassignment. Coordination and approval with
Personnel DMslon
• Develop new organizational charts
• Resolve space Issues, and location
• Communicate changes within the DOR.
DOR - 21
PRESENT
COMPTROLLER'S OFFICE
1992 ORGANIZATIONAL STRUCTURE
EXHIBIT 4
8 : D
~
COMI'TIlOLLEIl
OlIADE 23
I I I
FINANCIAL SUI'I'OIlT/ I'AYIlOLL SI'ECIAL TAX FINANCIAL
CONTROL ACCOUNTING SEIlVICES
FS SVC SYSTEN AOMIN. ASST. III
ANALYST FS SVC SI'EC IV FS UNIT SUI'V
OItADE 21 ORAD! 17 ORAD! 18 OIIADE 19
I I I
FS SPEC. II I I EXA/ ilINEIl TECH. II I I I
OItADE 16 ORAD! 13
INFO. P! lOC. SPEC. AOMIN. ASST. II FISCAL SEIIVICE FISCAL SEIIVICE ACCT. TECH. III ACCT. TECH. II
II SPECIALIST III SPECIALIST II
OIIADE II OIIADE IS OlIADE 17 0ItA0E 16 ORAD! 13 MADE II
I I ACCT. TECH. III I I
OlIADE 13
CLEIlK TYI'IST III AOMIN. ASST. I FISCAL SEIIVICE ACCT. TECH. III
SI'ECIALIST II
0ItA0E II OIIADE 13 OItADE 16 OlIADE 13
I I EXA/ ilINEII TECH. I I I
GftADE 12
CLEIIK TVPIST II ACCT. TECH. II FISCAL SEIlVICE ACCT. TECH. II
SPECIALIST II
OlIADE 9 OlIADE 11 GRADE 16 0ItA0E II
INFO. P! lOC. SI'EC. I I II
GftADE 11
ACCT. TECH II ACCT. TECH. II
GRADE 11 GRADE II
ACCT. TECH. II I
OItADE 11
ACCT. TECH. II
GRADE 11
ACCT. TECH. II
GftADE 11
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DEPARTUENT OF REVENUE
ADMINISTRATIVE SERVICES DIVISION
OFFICE OF THE COMPTROLLER
PROPOSED ORGANIZATIONAL STRUCTURE
EXHIBIT 5
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lXJI'TAOlLBV MlIlINISTlIATIVE
_ INISTlIATlIl f-- SECIlETMf'I
I I I
SlJ'I'CRTtPAVROLL SPECIAL TAX ESTATE TAX I' 1SCAL S! IlVICI! S I'IIWlCIAL SVCS
ADIlIN ASST. III I' 1S SVCS SPEC IV =.. rmr SVS11! IlS AllALVST m SVCS IIIIT
SlftIlVISlJI
I _ IN ASST. II EX. IIUIER EXAIl I' 1S SVCS ACCQ. IITING
I' 1SCAL S! IlVICI! S
TECH II TECH I SPEC. III I-- - TECH III
SPECIALIST II
_ IN ASST I ACCQ. IITIN3 EXAIl FIS SVCS ACCQ. IITING
. TECH III TECH I SPEC. II I-- - TECH II
INFO. PRlC. EXAIlllER CLERK FIS SVCS. ACCQ. IITIN3
SPECIALIST II TECH I TYPIST III SPEC. II I-- - TECH II
ACCXUiTIN3 INFO PRlC. CLERK ACCQ. IITIN3 ACCQ. IITIN3
TECH II SPECIALIST II TYPIST III TECH III f-- - TECH II
CLERK ACCXUiTIN3 CLERK ACCIJJfTIN3
TYPIST II TECH II TYPIST III - TECH II
CLERK ACCXUiTIN3 CLERK ACCXUiTIN3
TYPIST III TECH II TYPIST III '-- TECH II
DOR - 23
V4e92-
MQQGRAPHICS - INCOME/ CORPORATE ALES
TheRecords ManagementSectIon within the Administrative Services DMsIon Includesthree sections:
Micrographics, Income and Corporate Fles, and Warehouse operations. Two of the three sections have
closely aligned functions. Both are small and each has Its own supervisor. In addition, one unit has
employees serving as ' eads.- In this connection, an opportunity exists to combine the operations of both
Into one unit.
The Micrographics Unit is staffed by a supervisor and two leads plus five permanent line workers.
The lead clerks are classified higher than the line employees, but lower than the unit supervisor. One lead
supervises part time, the other lead position functions most often as a line employee. Temporary employees
( from one to fifteen) are added during heavy tax times, chiefly during Individual Income tax return season.
The unit's work consists of unstapllng, straightening and otherwise preparing all documents for microfilming,
operating several microfilming machines to microfilm all documents, and rebatchlng and restapllng material
for the Income and Corporate FUes Section.
The Income/ Corporate FUes section has a supervisor and two clerk typists. The section handles
copy orders of the source film ( seven copies are made by private vendor); distributes film copies throughout
the Agency; picks up and shreds small volumes of sensitive documents ( large batches are handled by
outside contractor); and serves as liaison for both the DOA Records Management Center and the Agency's
warehouse for sending and retrieving needed work documents.
Both the Micrographics and Income/ Corporate FUes supervisor Incumbents are cross- trained to fill
In for each other when required.
The micrographics supervisor's work consiGts chiefly of caring for the actual ( exposed and
unexposed) film Including splicing, refilming If required, and distribution. However, line employees are
trained and have their work scheduled by the two leads In the unit.
DOR - 24
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Much of the FUes Supervisor time Is spent In disseminating filing Information to agency personnel
( holdIng meetings), filling In for the two line employees ( shredding and document boxing work) and
coordinating activity with the Archives Records Management Center. This supervisor also Dis In for the
micrographics supervisor on occasion. A minimal percentage of time appears to be spent In actual
supervision.
In effect, there are four positions contributing to the 8Upervtslon of seven full- time and two part- tIme
line employees. The two sections' respective duties are necessarUy closely coordinated. Even though staff
requirements seasonally expand and contract, not all positions are needed for supervisory duties.
We recommend eliminating one of the two Administrative Support Supervisors and merging the two
sections of Micrographics and Income/ Corporate FMes. The proposed structure, togetherwlth other section
organlzatlonaJ changes Is highlighted In exhibit 6, Procurement and FacUlties/ Records Section, Proposed
Organizational Structure ( Administrative Services DMslon).
The resulting unit would have seven line employees, of which two would be leads assisting In work
scheduling and monitoring, and one supervisor.
The excess supervisory duties represented by the four positions now Involved In supervision wBl be
eliminated. Closer coordination and sequencing of operations between the two operations can be realized
by having a one unlt- one supervisor structure. Cost savings Include one Administrative Support Supervisor
I ( grade 14) at $ 26,538 ( Includes ERE).
• Communicate plan for unit consolidation to Records Management employees
• Eliminate position In ac- eordance with Personnel DIVISIon nJles.
DOR - 25
ADMINISTRATIVE SERVICES DIVISION
PROCUREMENT AND FACILITIES/ RECORDS SECTION
PROPOSED ORGANIZATIONAL STRUCTURE
EXHIBIT 6
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PIIDC SPEC II
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IlUVER I
I-IHICIIOIlRAPHICS
I I - I FILES ooT
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AllMIHISTRATIVE AllMINISTRATIVE ClEll(
SU'ERVIsal I SU'ERVIsal I
I
TVPIST II
( LEAl » MIClI: FILM c=_ IJ 0
TECH II
( LEAD) -. t; LfRK
MIClI: FILM _ I ~ TVPIST 1
TI: CH II
MIClI: FILM _. ClEll(
TECH 1 _ I TVPIST 1
MIClI: FILM ClERICAL
TECH 1 ASST.
HIClI: FILM ClERICAL
Tt'CH I I- ASST.
MIClI: FILM CLERICAL
I- TECH I ASST.
MIClI: FILM ClERICAL
I- TECH I ASST.
CLflI( ClERICAL
TVPIST I ASST.
CLERK CLERICAL
~ TVPIST I ASST.
DOR - 26
FACILITIES
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AIlIlIHISTRATIVE
ASST III
I
AllMIHISTRATIVE
ASST III
-
r~ l
RIllS ANALVST
III 1--'-
IlU'IER
ASSIST
V489J- 5
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ADDITIONAL AUQRNEY POSIDON
The Department of Revenue's IntemaJ Audit/ CrImInal Investigations unit funds one Attorney position
In the ArIzona Attorney General's ( AGo's) OffIce through an Intergovernmental Agreement. The Attorney
dedicates 100% of time avalable to the pursuit of criminal indictments by the Grand Jury and the
prosecution of criminal tax cases. The IntemaJ Audit/ Criminal Investigations Unit currently has 54 active
cases. The prosecutor In the AGo's OffIce receives tax cases referred by the Internal Audit/ Criminal
Investigation's Financial Investigations Auditors. The Internal Audit/ Criminal Investigations Unit averages
15 referrals per year. The prosecutor averages 12 criminal Indictments per year.
A backlog of seven active tax cases exists at the AG.' s Office with an estimated tax IlabHIty of $ 1.4
MUlion. Four active cases wli be added to the backlog within the next four months. In addition, nine of the
54 active tax cases at DOR awaiting referrals have a total estimated tax llabllty of $ 1.98 MUlion. The
remaining 45 tax cases at DOR are on hold because the degree of tax violation Is unknown or the
Investigation wli result In cM! action rather than criminal prosecution.
• One Prosecutor in the AGo's Office Is Insufficient to handle the volume of criminal
tax cases generated by the Intemal Audit/ Criminal Investigations Unit
• There Is a backlog of active tax cases awaiting prosecution
• Some active tax cases which are open have been awaiting prosecution by the AGo's
OffIce for years, which resUts In Flnanclallnvestlgatlon Auditors spending additional
time updating tax case records.
RecqrrmII....
We recommend the addition of one Attorney at the AG.' s OffIce to handle the volume of criminal
tax cases requiring prosecution.
DOR - 27
Bel"
• The proposed addition of ( 1) Attorney to the A. G.' s OffIce wli resUt In revenue
enhancement by Increasing the number of active tax cases prosecuted annually.
One attorney ( Assistant A. G.) =$ 55.000 Including ERE
The expenditure of $ 55.000 wli yield a ootentIaI collection of $ 1.98 MUllon ( nine tax cases at OOR)
In estimated tax lIabilty plus $ 1.4 Millon ( seven tax cases at the A. G.' s OffIce) In estimated tax IIabUIty
• An additional Attorney wli enable the A. G. · s OffIce to adequately handle the volume
of active tax cases referred for prosecution by the Intemal Audit/ Criminal
Investigations Unit
• Voluntary compliance Increases when criminal prosecutions and convictions are
printed In the f18\ YSP8P8r
• Reduces the number of backlogged active tax cases
• Increase the number of active tax cases referred to the prosecutor In the A. G.' s
Office
• Reduced necessity for updating tax case records awaiting prosecution
• Total estimated revenue enhancement approximates $ 1,980,000 with a potential total
estimated revenue enhancement of $ 3,380,000 ( includes convictions on all seven tax
cases currently In the A. G.' s OffIce with a potential total estimated revenue of
$ 1,400,000).
• Communicate with the A. G.' s OffIce regarding Intentions to fund an additional
Attorney for prosecution of criminal tax cases
• Increase budget request to cover the funding of the additional position
OOR - 28
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• Obtain Position Description Questionnaire ( pDQ) from Attorney General's OffIce and
coordinate the establishment of one additional Attorney position at the A. Go's OffIce
• Coordinate recruitment and special selection preference through State Personnel
Division for Interviewing and selection by the Attorney General's OffIce
• Coordinate the additionai Attorney's responsIbiltles and duties with the other
Prosecutor funded by DOR In the A. Go's OffIce.
DOR - 29
ARMORED CAR PlQQJP S01EDUI.. E
At present, a eut- off time d 2: 00 pm has been established for Remittance Processing to submit Its
last transmittal d cash/ checks to the Comptroller's OffIce. ThIs early eut- off Is required to provide the
Comptroller sufficient time to prepare the Cash Latter and accompanying deposit documents for Security
Pacific - the depository bank. Security Pacific Bank presently schechJes Its final armored car pick- up of
the day for 3: 30 pm.
In this connection, an opportunity exists to accelerate the bank deposit of payments received each
day by DOR of Income Tax returns.
The Comptroller has stated that the bank does not actually require receipt of the final deposit untO
6: 00 pm of each day and that, If the final pickup of cash/ checks could be delayed another hour, the
Comptroller's OffIce - working with Remittance Processing - could significantly Increase the daHy deposit
amount.
Recommertia'blS
We recommend the State Treasurer's Office negotiate for a 4: 30 pm pickup by Security Pacific Bank.
Discussion with this Office Indicates the bank Is wiling to comply.
After being Informed of the new pick- up schedule by the State Treasurer, the Comptroller's Office
should arrange with Remittance Processing for a later dany cut- off.
The avaUabUIty of these extra deposits will assist In Improving " cash fiow." As an example, twice
yearly, a cash " crunch" Is experienced when the AprU and May expenditures for State AId to Schools
DOR - 30
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become due. For eight months of the year. the Treasurer Is liable tor $ 100 mUllan plus payments to the
schools. However. In AprU and May, the payment amounts are doubled. res~ ng In $ 200 mUllan plus
expenditures on the 15th day of each month. To meet these obligations, the Treasurer's OffIce may at times
be required to Issue Treasurer's Warrant Notes. The Treasurer's OffIce has calcuated the Interest due on
such a short- tenn loan would be paid at approximately the same rate as short tenn tax anticipation. or
revenue anticipation notes.
No savings are projected. The main benefit Is the Improved cash flow tor the Treasurer's Office and
the prevention of short- term borrowing.
Implementation activities:
• Renegotiation of armored car pickup schedule with Security Pacific Bank by the Treasurer's
office.
• Change to a later cut- off time for final cash/ checks delivery by Remittance Processing to the
Comptroller's office.
DOR - 31
a. ERICAL SUPPORT - TAXPAYER INFORMA1JON & ASSISTANCE
Clerical assistance within the Taxpayer Infonnation and Assistance SectIon Is rendered through
a separate clerical unit headed by an Administrative Support Supervisor. This does not allow for the revleYI
of the clerical pool within the same unit where the work originates. Quality Control of work can be
strengthened by distributing the clerical employees to the work unit.
The Phoenix location of the Information and AssIstance section Is organized Into two units ­Business
Tax and Income Tax. A separate support unit Is composed of seven clerk typist positions and a
supervtsor. Each unit has telephone unit personnel for answering questions. and case workers for handling
research on the more difficult taxpayer issues.
Two levels of clerk typist are In the support unit. The three clerk typists I positions handle primarily
document pulls and microfilm copies needed for case workers' research. These employees also serve as
receptionist/ telephone switchboard operators for the Department. The clerk typist II positions handle the
typist load for the case work units.
The current work flow process Is shown In Exhibit 7, Caseworker Clerical Support, Present Work
Row Process. Handwritten work to be typed ( usually correspondence) Is generated by the case workers
In both the Business Tax and Income Tax units. Work to be typed Is assigned by the clerical supervisor.
Most work Is proofread by the clerical supervisor. given to the quality control unit for another quality check
along with the completed case file. The quality control unit sends taxpayer record adjustments to the
Comptroller's Office, If required, and then mans out correspondence.
The quality control for typewritten work does not rest with the originating caseworker or
C8S8Vi0rker supervisor. but Is located Instead In the separate clerical unit. Only under exceptional cases
( e. g., a requirement for some clarification) would the typist material return to the originating unit.
Documents and mlcrofHm pulls needed to complete casework research are also conducted within
the separate clerical unit. after the originating assignment has surfaced from the case worker.
DOR - 32
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We recommend reassigning those clerical unit employees who handle casework typing and
document pulls to casework units coordinating the research and generating the typewritten work, and
eliminating the clerical unit supervisor. The Individuals who are Involved In receptionist duties should be
assigned to either of the unit supervisors or the section administrator.
Typing and other clerical work & hOOd be reviewed by the originator and unit supervisor along with
the rest of the elements of the case. The caseworker supervisor wli provide supervision for the entire unit,
eliminating the need for the clerical unit supervisor. The proposed process Is shown In Exhibit 8, Casework
Clerical Support, Proposed Work Flow Process.
We also recommend Investigating the feaslbUIty of having case workers perform typing functions
through automated systems, thus reducing the need for clerical staff.
Assigning the clerical support staff to the units which originate the need for this support wli
establish quality control at the lowest possible level and at a point closest to the originating case research.
All elements of the case, including basic research, documents revl9Vt'ed, action taken, and correspondence
developed wli be under the control of the case work unit supervisor.
Cost savings Include: elimination of the clerical unit supervisor - Administrative Support Supervisor
( grade 14, salary plus ERE) = $ 26,538
• Communicate reassignment plans to Taxpayer Information & AssIstance staff, Including
changes In work process.
• Implement plan In accordance with State personnel rules.
DOR - 33
CASEWORKER CLERICAL SUPPORT
PRESENT WORK FLOW PROCESS
EXHIBIT 7
CLERICAL UNIT WORKER QUALITY CONTROL UNIT
QUESTJON
IlEEDIIIII
ItESEAltCH
OOClAlENT
I'ULLS/ IlICRO
FILII ItESEAltCH
DOA - 34
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W4403- 6 I
I
CASE FILE
QUALITY
CHECK
NAIL- OUTI
TAXI'AYER
ADJUSTNENT
TYI'E j
CORRESI'DNDENCE
t--- t----~~----+--+ t
1
CORItESI'OlIDENCJ
QUALITY
CHECK
CONDUCTI
COIlI'LET£
ItESEAIICH
GENERATE J REVIEW
HANDWRITTEN c;:: J'--+--:__ F_ IL_ E_......
FORWARD
FILE
CASEWORKER CLERICAL SUPPORT
EXHIBIT 8
UNIT IWlAOER QUALITY CONTROL UNIT
DOCUMENT
PULL/ NICRO
fILM RESEARCH
PROPOSED WORK FLOW PROCESS
( ASSUMES ELIMINATION OF SEPARATE QUALITY CONTROL UNIT)
QUESTION
NEEDING
RESEARCH
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CONDUCT/
COMPLETE
RESEARCH
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CHECK, CORR./
COMPLETE FILEtt----- i--------------'
CASE fILE
L---+--+------ i_----+--+ lOUALITY CHECK ...--+---..
NAIL OUT!
TAXPAYER fILE
ADJUSTNENT v
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I OCR - 35
' 4404- 6
REASSIGN QUAlJJY CONTROL RJNCDON TO UNE lNIS
WIthin the Taxpayer Information Unit Assistance Section Is a two person Quality Control ( Q. C.) unit
reporting to the SectIon Manager. The quality control review of the work performed In the section C() ljd be
Improved by having this function conducted by the sub unit where the work originates. If necessary, the
unit supervisor Is also In a position to further ensure quality as required.
The work process Is shcMn In exhibit 9, Caseworker Quality Control, Present Process. Work In the
section flows from the origin of a case file Into either the business tax or Income tax unit. A file Is opened,
and research begun, for those taxpayers having questions which require research before an answer can be
forwarded.
Case workers assigned research topics utBlze the clerical employee to pull hard copy documents
or microfiche to determine taxpayer file or account status. When research Is complete, the case file and
any handwritten correspondence tor the taxpayer Is forwarded to the clerical unit. The clerical unit types
necessary material and forwards the file with typed correspondence to the Quality Control Unit.
The Quality Control Unit Is composed of a taxpayer services employee and a supervisor. The
majority of the quality control work Is accomplished by the taxpayer services employee. The supervisor
assists in the work and supervises the single employee.
Once the case file is reviewed and determined to be In order, adjustments to taxpayer records are
ordered and correspondence, If Involved, Is maled out. Changes to taxpayer records ( e. g., accounts
receivable - the majority of Issues needing research by the section) are not made by this unit. The reqUired
changes are logged and sent to the accounts receivable section ( Administrative Services OMslon) to be
adjusted by that section's employees.
Several days after the changes have been requested by the Quality Control Unit, one of the two
employees contacts the Accounts Receivable Section to determine If changes have Indeed been
Incorporated. If not, the unit follows up to determine the cause tor the delay.
OOR - 36
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Quality Control of the cases researched does not rest with the originating sub unit Invotved In
working each case. At. the unit manager level, no evidence was found that any quality control actions take
place. Instead, the section relies on a separate unit to administer the quality control function.
Recomn · · WP-We
recommend eliminating the quality control unit and realigning the quality control functions, now
administered by the Q~ C. unit, with the first level case worker supervisor and, as required, the two Business
and Income Unit Managers. The revised process is shown In exhibit 10, caseworker Quality Control,
Proposed Process.
The section has sufficient management/ supervisor levels In place ( Section Administrator, Unit
Manager, and case worker supervisor) to accommodate both quality assurance and quality control functions.
Assigning quality control functions to the supervision of those units which originate the case work
establishes those control functions at the lowest possible level and at a point closest to where the research
is actually accomplished.
WIth the Introduction of clerical support Into the work unit ( see Recommendation entitled - Clerical
Support- Taxpayer Infonnatlon & AssIstancej all elements of research can be quality checked by the existing
supervisory chain Instead of a separate employee unit. In effect, quality control Is established at the level
of work accountabllty - the supervisor and manager of the work process.
Cost savings Include: elimination of the quality control unit with the following positions and costs
Oncludes salary and ERE):
DOR - 37
OOR · 38
• Implement plan In accordance with State Personnel Rules.
• Communicate function reassignment plans with staff affected. Include specific changes In
process
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$ 49,752
One Taxpayer Services Technician III ( Grade 14) $ 26,538
One Taxpayer Services Technician II ( Grade 12)
Total
I CASEWORKER QUALITY CONTROL
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QUESTION
NEEDING
RESEARCH
PRESENT PROCESS
I CLERICAL UNIT SU'ERVISOR I CLERICAL UNIT WORKER
DOCUMENT
l'ULLS/ IlICRO
fIUl RESEARCH
EXHIBIT 9
QUALITY CONTROL UNIT
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CONDUCTI
CON'LETE
RESEAIlCH
1
GENERATE
HAIlDWJUTTEN
~
FORWARD
FILE
REVIEW
FILE
COftRES'ONDENC~
QUALITY
CHECK
' DOR · 39
CASE FILE
QUALITY
CHECK
I
IlAIL- OUTI
TAX'AYER
ADJUSTNENT
WU81- 6
CASEWORKER QUALITY CONTROL I
PROPOSED PROCESS
( ASSUMES ELIMINATION OF SE'ARATE QUALITY CONTROL UNIT)
TAXPAYER SU'~ T
CASEWORKER
QUESTION
WEEDING
RESEARCH
CONDUCT'
CON'LETE
RESEARCH
CASEWORKER UNIT
YY'IST'CLERK
DOCUMENT
' ULL'MICRO
FILM RESEARCH
I CASEWORKER SLWERVISOIt I UN IT MANAGER
EXHIBIT 10
QUALITY CONTROL UNIT I
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GENERATE YY'E J HANDWIlITTEN
CORRES~ DEIICE---+--"'" CORRES'ONDEIICE
CHECK, CORR.'
CON'LETE FILE t+---+-----... l
'--"'~
CASE FILE
L---...--+------ t~----+_-..., QUALITY CHECK ~--+--..
---..,... r--..
NAIL OUT'
..... v •• wr ...
'""'--" I~ n r ~~
ADJUSTMENT
OOR - 40
S'OT
CHECK
v
W4482- 6
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SALES TAX UCENSE ENFORCEMENT
The Department of Revenue enforces the Transaction Prlvlege Tax Ucense required of business
organizations by identifying, through a variety of research and Investigative methods, those businesses
operating without a tax license. Although large numbers of businesses have been identified through current
and recent past efforts, Agency staff feel that maximum enforcement efforts have not been reached. In this
connection, thirteen employees are currently Involved In tax license compliance efforts.
The strengthening of the enforcement efforts have taken place under the PIER Program ( programs
for Increased Enforcement Revenues). This was a program Introduced by the legislature In FY 1990- 91 and
again in 1991- 92 through which 297 new positions were established targeted specifically for revenue
enhancement activities throughout the Department. Some of the PIER positions have been placed In license
compliance activities.
Initial efforts In tax license compliance were highly successful. yielding close to one mUlion dollars
annually per license enforcement employee. Continuing efforts are stUt yielding significantly Increased
collections through these enforcement actions; most recent data shows that generated amounts equate to
more than $ 600,000 per year per employee. Even though compliance efforts are currently bringing In
smaller amounts of dollars because high priority ( large size) accounts were the Initial businesses brought
Into compliance. the Department feels that added effort will continue to bring In far more dollars than
costs.
Recomnw'fWiot1S
We recommend the addition of three enforcement employees to further strengthen the sales tax
license compliance efforts now underway. These employees could be distributed In both Phoenix and
Tucson to join the compliance efforts already underway.
DOR - 41
It Is estimated that the addition of each active enforcement employee will generate an average of
$ 200,000 per year In added sales tax license and sales tax remittances. Sixty percent of this amount would
accrue as added State revenue ($ 12O, OOO); the remainder Is added revenue generated for local
govemmental units through local government sales tax licenses and remittances.
Revenue enhancement to the State Is $ 380,000. The cost of persOnnel to Implement Is $ 74,520,
Including ERE.
There will be a one- time cost for fumlture and equipment of $ 25,500 and recurring costs of $ 5,000
for travel and other operating expenses.
Total annual DJt enhancement Is $ 280,480.
• Establish positions through the legislative process or through reassignment of other state
govemment positions
• Recruit employees and assign work
DOR - 42
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CORPORATE AUDIT RESTRUCTURE
The Corporate Audit section coUd be better organized In a way to maximize the use of Its work
force to eIficientIy manage Its work flow. The Corporate Audit Section has four Field Audit units which are
responsible for the on- site auditing of corporations. There Is also one OffIce Audit Unit which, In addition
to providing all support and clerical services to the entire section, Is responsible for conducting a variety of
audits using IRS and Internal reports. The Office Audit unit does all of Its work - in- house- and does not
conduct field audits.
The present organizational structure of the Corporate Audit Section reflects a limited number of
clerical staff to support the Section's work ( see exhibit 11, DMslon of Tax Enforcement, Corporation Audit
Section - Present Organizational Structure). It also reflects a very broad span of control for the OffIce Audit
unit supervisor with a mix of clerical positions, Exam Teehs and Revenue Auditors. The present organization
has a preponderance of auditing functions directed in the field audit activities.
Previous additions to staff have resulted in Increased revenue generations. In this connection,
additional opportunity exists to increase revenue generations. However, based on the following
considerations, Agency management has no plans in the current budget cycle to specifically increase
staffing:
1) Numerous new positions have been added In the last few years
2) Agency management wants to use current staffing more efficiently.
Under the present organizational configuration with Its shortage of clerical support and
preponderance eX positions dedicated to field audit activities, the Corporate Audit Section has been forced
to use Its Exam Tachs to · do data Input and other clerical functJons rather than doing simple office audits,
and research. Office Audit functions are restricted to existing staff, thus limiting the unit's overall audit
aetMty. Office audits generate more revenue per auditor at less cost for salary and travel than field audits.
Anally, the span of control for the OffIce Audit Supervisor Is currently 17 positions, and includes a mixture
of support functions as well as office audit functions.
DOR - 43
8ecorm_ tietfo-.
We recommend the following Improvements:
• Create a new unit to handle support functions for the Corporate Audit 88dIon. this
wli relieve the Audit Supervisor from having to supervise support staff and
consolidate support functions In a single unit.
• Establish an Administrative Support Supervisor I position ( grade 14) to supervise this
proposed unit. This position Is required to address the unit's support aetlvltles.
• Establish two additional Clerk Typist / I ( grade 9) positions to augment existing
clerical support. This will allow the Exam Tachs to be relieved of clerical
responslbBltles and free them for research and tax audit work.
• Transfer all examiner techs and existing and proposed clerical support staff to the
Administrative Support unit. This concentrates support functions In one central
location under one supervisor.
• Establish two additional Revenue Auditor III positions ( grade 18) and locate them In
the Office Audit unit. This enhances the office audit unit's capabUIty to Increase
collection.
• Downgrade three Revenue Field Auditor II positions ( grade 19) to create the two
Revenue Auditor III positions and to create some of the funding for the establishment
of the Administrative Support Supervisor and the Clerk Typist / I positions. The
remaining position and funding can come from positions eliminated in other
recommendations:
( See Exhibit 12, Division of Tax Enforcement - Corporate Audit Section, Proposed Organizational
Structure for detaUs.)
DOR · 44
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The following benefits wli be realized:
• Downgrading two of the three Revenue Field Auditor II positions ( grade 19' 8) to
Revenue Auditor III positions ( grade 18) wli yield an annual savings of $ 5,988. This
Is calcUated on the basis of midpoint salary for a grade 18 at $ 29,203 per annum
versus the midpoint salary of a grade 19 at $ 31,647 per annum, plus a .225
Employee Related Expense ( ERE). This Is $ 2,994 per position times the two
positions
• Downgrading the third Revenue Field Auditor II position ( grade 19) to an
Administrative Support Supervisor I position ( grade 14) will yield a savings of
$ 12,229 per annum. This Is calculated on the basis of a mid- point salary for an
Administrative Support Supervisor position ( grade 14) at $ 21,664 versus the salary
for a Revenue Aeld Auditor II ( grade 19) at $ 31,647 per annum, plus a .225 ERE
• Downgrading the three Revenue Aeld Auditor III positions ( grade 19) will generate
$ 30,000 in savings. Each position currently expends $ 10,000 per year on In- state
and out- of- state travel
• These savings and some savings from other recommendations generated can be
used to establish the two proposed Clerk Typist II position ( grade 9) at a cost of
$ 39,352, including ERE
• Restructuring of the Section for Corporate Audit improves efficiency, maximizes the
use of Its staff and generates savings
• Establishing two more clerical positions and an Administrative Support Supervisor
position allows the three Exam Teehs to begin to conduct simple office audits
instead of the clerical functions they are now performing. The anticipated revenue
to be generated through the redeployment of the Exam Techs Is projected to be
$ 1,500,000 per year
DOR - 45
• Reclassifying the Revenue Field Auditor II's to the OffIce Audit position of Revenue
Auditor III wli yield the following changes In revenues:
- The average Revenue FIeld Auditor II generates an average of $ 350,000 In collections per
year. Downgrading three positions retUts In a projected loss of revenue on the field audit
side of $ 1,050,000 per year
- The average OffIce Auditor ( Revenue Auditor III wli generate an average of $ 750,000 per year
In collections. Adding two new OffIce Auditors wli result In projected revenues of $ 1,500,000
per year
- The net gain In revenues from these two sections Is $ 450,000 per year
• Total recurring savings In staff and travel for this recommendation In State dollars
Is $ 8,865 per year
• Total prQjected revenue for this recommendation Is $ 1,950,000 ($ 1,500,000 from the
Exam Techs and $ 450,000 from the two OffIce Auditors.
Grand Total = $ 1,958,865
( There will be a one- time cost for five networked personal computers with software - estimated to
be $ 25,000).
1-- 1 ......,. .....".
• Develop reorganization proposal and submit along with required paperwork to
agency management for approvai and routing to Personnei
• Agency budget request should reIIect added clerical position or a position within
DOR shotJd be reallocated to Corporate Audit
• Transition Exam Tech to doing simple audits. This should Include training, etc.
• Develop plan for expanded OffIce Audit activities based on known workload.
DOR - 46
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- - - - - - - - - - - - - - - - - - -
DEPARTMENT OF REVENUE
DIVISION OF TAX ENFORCEMENT
CORPORATE AUDIT SECTION
PRESENT ORGANIZATIONAL STRUCTURE
EXHIBIT 11
§
~
RE'IBU' FIelD AllHINISTRATIVE
AWIT I1ANAGBI SECRETARY I
GRADe 23
I--
GRADe 12
1
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~ 1I. t: FIELD RE'IBU' FIELD RE'IBU' FIELD RE'IBU' FIELD ~ Mn RE'IBU' FIELD
AW: T SIJ'I'( IIT AWIT SIJ'I'( IIT AWIT SlI'I'CIlT AWIT SIJ'I'( IIT AWITlJI III
lJlAIlE 21 GRADe 21 GRADe 21 GRADe 21 GRADe 19 GRADe 2e
1 1 I 1 1 1
~ 1 « E FIELD REVEIU! FIELD RE'IBU' FIELD RE'IBU' FIELD RE'IBU' AWITlJI RE'IBU' FIELD
AllITlJI III AWITlJI III AWITlJI III AWITlJI III III AWITlJI II
GF'AIlE 2e GRADe 2e GRADe 2e GRADe 2e GRADe 18 GRADe 19
4 4 4 4 9 1
[!'- REVEIU! FIELD RE'IBU' FIELD RE'IBU' FIELD REVEIU! AWIT II
AllITlJI II AWITlJI II AWITlJI II AWITlJI II
Gl'AIlE 19 GRADe 14 GRADe 19 GRADe 19 GRADe ! 7
5 7 5 2 3
CLERK moIST III EXNIINER TEOi I
GRADe 11 GRADe 12
I 3
ClERK moIST III
GRADe II
1
ClERK moIST II
GRADe 9
1
CJ'FICE AlIIIT
NIl SIJ'I'( IIT
SERVICES IJIlT
lIEX4A-{>
DEPARTMENT OF REVENUE
DIVISION OF TAX ENFORCEMENT
COPORATE AUDIT SECTION
PROPOSED ORGANIZATIONAL STRUCTURE
EXHIBIT 12
REVEJU: FIElD RE'IEIU FIElD
AlllITlJl II AlllITell III
EIIWlE 19 GRADE 2.
1 I
~• S
_ IIC! ~ '' IIOI£ ST
I I
AllIlIIET'IESIlUI'E: RFVIEISlDIJI .... MIl~~~ _ 21 EIIWlE 21
I 1
RMEVIlEIJTUl: JIFIIEILID Il~. 1! ittlnD
EIIWlE 2t IlRAIl£ 2t!
4 4
IIE'IEIU: FIELD IIE'IEIU: FIELD
. II. OITlJI II . II. OITlJI II
IlRAIl£ 19 0RAIl£ 19'
5 4
FIElD AIlDn
IJIIT
PtaNIX
] REVEJU: FIELD AOItINISTRATIVE
AlllIT IIAHAGER SECRET.\ RY I
GRADE 23
'--
GRADE 12
1 I
I I I I
. II. OREITVESJlUI': ERFIVEILSDlll . II. OIIEIT'IESIlUI': ERFVIEILSDIJI ~ I~ IT ~ SII'I'SlIJII lIT
GRADE 21 GRADE 21 -" _ 14
I I I I
IIE'IEIU: FIELD IIE'IEIU: FIELD ~ IfI'I1lJ1 ! XNIJII! II reat I
MIlITlJI III . II. OITlJI III
llRJlOE 2t llRJlOE 2t _ II _ 12
4 4 " 3
IIE'IEIU: FIELD IIE'IEIU: FIELD ~ I. II. OITlJI CI. fII( TYPIST III
. II. OITlJI II . II. OITlJI II
llRJlOE 19 llRJlOE 19 _ 17 _ II
5 2 3 I
CLERK TYPIST III ClERK TYPIST II
GRADE "
GRADE 9
1 3
TUCSlJI FIELD
AlllIT lMIT SII'I'lIlT SERVICES
Fell SECTION
• PIO'OS£ O ESTABlISIttEIIT a' AOItINISTRATIVE SII'I'lIlT 9~ I POSITION ( 4) TO SlI'ERVISE SII'I'lIlT SERVICE
PIO'OS£ O ESTAlllISIttEIIT a' NEll CLEIlII; TYPIST II ( IJtIJJE 9) TO P! l7t' 10E NEEDED ClERICAl SlJ'I'CllT m~ TJim ff~~ I9~ IIV< n; S~~ nUt[~~~~ IIII(~ AmFIEO TO ( 2) REVEJU: MIlITlJI III ( GRADE 18)
._ PIO'OS£ O ESTABlISIttEIIT a' ( 2) RfIEllJE MIlITlJl III IIlRAIl£ 18) TO INCREASIE a'FICE MIlIT ACTIVITIES
- __ 48
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WITtt10lDING TAX TRANSFER
Employers In Arizona are required to Interact with two State agencies In the collection and audit of
withholding and unemployment Insurance taxes.
The Department of Revenue ( COR) Is responsible for tax collection and audit activities for employer
withholding tax and the Department of Economic Security's ( DES) Is responsible for the Unemployment
Insurance ( UI) Program. Both Agencies relate with the same employers In the collection and audit activities
for unemployment Insurance tax. There Is a 98% match of employers between the two tax areas.
Both DOR and DESjUI employ staff to process tax payments and to perform audits of Arizona
employers. Each agency maintains separate time frames, procedures, and forms, for tax submittal, and
conducts audits using their own methodology and schedules. It should be noted that there are two Field
Auditors assigned to the withholding unit at DOR and 45 Auditors In the UI Tax Program.
There are two major state agencies Interacting with the same employers, each utUlzlng different staff.
collection and audit methodologies, forms, and scheduling.
This situation results In dUplication of effort, specifically In the audit area, but more Importantly Is a
significant burden for employers. Employers are required to follow two different sets of guidelines, to
schedule different dates for audits, and to utUlze different forms In order to comply with the two State
agencys' policies and procedures.
There Is also a disparity In the level of audit coverage between the two agencies. WIth only two
auditors In DOR assigned to Its withholding audit program, the number of audits conducted Is far fewer than
the DESjUI Tax side which employs 45 auditors. This obviously Increases the possIbUlty that non- payment
and other violations such as late payment and underreportlng wli go undetected by DOR Field Auditors.
This translates to lost revenue and non- compllance with Arizona tax code.
DOR - 49
We recommend the following Improvements:
• Transfer the withholding tax responsIbilties d DOR to the DES/ UI Program along with all staff
currently specifically identified to the withholding area, except audit staff
• Perform an analysis to determine the number d FTE positions working within the withholding
tax area, specifically In the document's processing, data entry, data processing, Comptroller, and
collections area, and transfer positions associated with the number of FTE positions to DES
• Standardize policies, procedures, and forms
• Reassign each of the two Revenue Field Auditors currently employed to conduct withholding
audits back to the Sales and the Corporate Audit Section respectively.
• The auditor reassigned to Sales Audit will generate $ 420,000 In collections annually
• The auditor reassigned to Corporate Audit wHl generate $ 350,000 In collections annually
• Total revenue to be realized by redeploying these two staff Is sno, ooo annually
• Eliminates major over1applng functions and creates one tax entity for employers to deal with In
the UI and Withholding Tax areas
• Significantly reduces workload and procedUral complexity for employers
• WIll provide for much broader coverage In the withholding tax auditing of employers
• UI staff Indicate there are significant savings to be realized but the actual dollar figures are
not available ( no historical data)
DOR - 50
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- There will need to be shared cost ( per Federal law) of the 45 UI auditors since they cannot
do State work using Federal funds
- There will be start- up costs, Including EDP and planning for which State dollars will need to
be made avalable. These costs are dlfflcllt to estimate at this time
- The shared costs and start- up costs should be more than offset by the revenues generated
through comprehensive audits.
• legislation needs to be amended to facDltate transfer
• Set- up a transition task- force comprised of key staff from both agencies to develop a transition
plan ( general funds to cover salaries of federally funded task force members will need to be
appropriated)
- Analyze EDP requirements and budget
- Analyze personnel needs, Including existing dedicated staff and FTE's at DOR ( previously
identified)
- Identify other Issues pertinent to transfer and make recommendations
• Develop shared cost methodology per federal law, for audit staff and budget accordingly
• Develop budget for other up- front costs identified
• Implement transfer over an 18 month transition period
• Start- up and shared staffing costs are to be determined In Implementation phase. However,
these costs should more than be offset by the revenues generated by Increased and enhanced
audit activities.
DOR - 51
QUAUTY CONTROl RJNCOONS - AD'S OFACE
There are two Quality Control ( QC) positions ( Revenue Field Auditor Ill's · grade 19) organizationally
housed In the AssIstant Director's office. However, we find that they are not engaged In significant QC
aetMties.
These two positions are theoretically supposed to be used for randomly reviewing audits In the
Individual, withholding, sales and corporate audit areas. The two positions report directly to the AD's
Executive Staff Assistant. In discussing their activities, one of the Individuals commented that they do few,
If any, random reviews of case audits.
I" I"!
As one of these two positions Is not actively engaged In QC reviews and as updated Supervisory
revl8YI functions should allow for Increased QC, one of the two positions Is lost to production audit
functions. In effect, the Department and the State loses the revenue this audit position can generate.
R8CQITII118I tiptior IS
We recommend one of the quality control positions be transferred back to the sales tax audit section
and assigned a caseload. We further recommend the remaining quality control position concentrate on
quality control work In the Individual Audit SectIon, per the Auditor General's report...
• The sales tax audit position wUl generate approximately $ 420,000 per year In actual collections.
DOR - 52
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• Transfer the Revenue Field Auditor position back to the area Identified
• Assign caseload.
oOR - 53
INDIVIDUAL INCOME TAX AUDfT
The Individual Income Tax Audit SectIon Is responsible for the auditing of Individual income tax and
employer withholding taxes.
To ensure consistency and accuracy in the performance of audits, the Individual Income Tax Audit
Section has reassigned a Revenue Auditor III in each of Its seven units located in Phoenix and Tempe to
review ail audit findings. This was done because of the broad spans of control managed by the Revenue
Audit Unit Supervisor I positions in each location. In this connection the Revenue Audit Unit Supervisors
do not have adequate time to review audits themselves and typically review a case only if an informal review
of findings Is requested by the taxpayer.
The large spans of control do not permit the Revenue Audit Unit Supervisors to do the audit reviews
which should be an Integral part of their duties ( see Exhibit 13, Individual Income Tax Audit Section, Present
Organizational Structure. and Exhibits 14- 17 for Unit Organizational Structure).
This situation requires that they assign a Revenue Auditor III to do new reviews. Since they are
doing audit reviews almost full- time they are not avaDabie for audit production work which Is the Revenue
Auditor Ill's primary responsibUIty.
We recommend the following actions to Improve spans of control and workload distribution.
• Reclassify five of the Revenue Auditor III ( grade level 18) positions to Revenue Audit Unit
Supervisor I's ( grade level 19) to create four additionai audit units. In this connection, we
recommend the following specific actions:
- Allocate two of these units to the Phoenix office
- Allocate two of these units to the Tempe office
OCR - 54
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- Abolish a Clerk Typist II ( grade level 9) to create funding for the reclassification of this
position which does correspondence is earmarked for elimination from the Administrative
Support Unit. A new letter package is being implemented on the computer system which
will reduce this position's workload)
• Restructure the existing and new units to equalize spans of control ( see exhibit 18, Individual
Income tax Audit Section - Proposed Organizationai Structure, and exhibits 19- 22 for Unit
Organizational Structure).
• Reallocate the remaining two Revenue Auditor III positions to do actual audit work
• Assign audit reviews to unit supervisors
• The two Revenue Auditor III positions which are reallocated to full- time audit activities wUl each
generate $ 353,000 in collections annually for a tg.;! of $ 705.000 In new revenue
• The abolishment of a Clerk Typist II ( grade level 9) position wUl create $ 16,062 salary plus $ 3,614
ERE (. 225) for total avalable funds of $ 19,676 to effect reclassification
- The cost of reclassification wUl be $ 14,965 ( the difference between grade 19 and grade 18
at the mid- range salary level plus .225 ERE)
- § a! ary savings of $ 4.711
• Provides for the proper span of control to facDltate the assumption of audit reviews by
supervisors.
IDJJIegw," i!!
• Abolish clerical position to create funds for reclassifying Auditor III position
• Create five additional Revenue Audit Unit Supervisors from five of the seven Revenue Auditor III
positions currently engaged in full- time review activities
DOR - 55
• FBI new positions and restructure units per Exhibits 18- 22. PrQPOS8d Organizational StructyrU
• Restructure the Unit Supervisors positions to Include review functions.
• Reassign the remaining ( 2) Revenue Auditor III positions to full- time audit activities
• Athorough analysis of the clerical pool ( Administrative ServIces) needs to be conducted to
determine If It can be realigned to address work In a more efficient manner. The change to a
new letter package system also mandates a need for review
• An analysis of the Tucson office audit and clerical functions needs to be conducted for possible
restructuring consistent with the Phoenix and Tucson office alignments. There may be some
Increased costs associated with changes, If implemented
• Purchase networked personal computers for newly created supervisor positions. Estimated one­time
cost of $ 25,000.
The withholding unit is not reflected In the proposed organizational chart since it was recommended
that the withholding tax activities be transferred to DES ( see Withholding Tax Transfer for further
information).
DOR - 56
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- - - --, - - .... - _.. -- - - .. .. -
§
~
DEPARTMENT OF REVENUE
INDIVIDUAL INCOME TAX AUDIT SECTION
PRESENT ORGANIZATIONAL STRUCTURE
ADMINISTRATION ADMINISTRATOR PIlOGRAM & PROJECT
SECRETARY I INDIVIDUAL INtDME SPECIALIST II
TAX AUDIT SECTION
ORADE 12 ORADE 23 ORADE 19
1 POSITION 1 POSITION 1 POSITION
I I I I
Il£ V! NUE AUDIT ADMINISTRATIVE REVENU€ AUDIT REVENUE AUDIT Il£ V! IIUI! AUDIT
SUPERVISOR II SUPPORT SUPV III UNIT SUI'V I UNIT SUPV I UNIT SUI'V I
eRAOE Ie GRADE 17 GRADE 19 ORADE 19 eRAOE It
I POSITION I POSITION 1 POSITION I POSITION I POSITION
I I ,-----------------------------._---------------------,
EXHIBIT 13
PHOENIX ADMIN SUPPORT
PHOENIX/ TEMPE
TUCSON TEMPE
V4DOR- 3
DEPARTMENT OF REVENUE
INDIVIDUAL INCOME TAX AUDIT SECTION
PR[ SENT ORGANIZATIONAL STRUCTURE
PHOENIX
EXHIBIT 14
~.
~
ADMINISTRATOR
INDIV. INCONE TAX
AUDIT SECTION
GRADE 23
1 POSITION
IlEVENUE AUDIT
UNIT SUPV II
GRADE Ie
1 !' OSITION
I I I I I I
llEVENUE AUDIT IlEVI! NUE AUDIT IlEVEIIUE AUDIT REVENUE AUDIT REVENUE AUDITOR IlEVENUE AUDITOR IlEVENUE FIELD
UNIT SUPV I UNIT SUP'V I UNI'r SUPV I UNIT SUP'V I III III AlIOITOR II
0IlADE 19 ClIlADE 19 GRAllE 19 ClIlADE 19 0IlADE III IllADE 11 ClIlADE 19
I !' OSITION I P'OSITION I I'O! IHION 1 P'OSITION 4 P'OSITIDMS 4 P'OS ITIOIlS Z POSITIOIlS
HEARINO UNIT " IEL. D AUDI
IlEVENUE AUDITOR IlEVENUE AUOITOR IlEl/ EIIUE AUDITOR IlEVENUE AUDITOR IlEVEIIUI! AUDITOR
III III III III II WITHHOL. DIN
l- i-' r-- r-- I-
0IlADE III GllADE III ClIlADE III ClIlADE III IllADE 17
3 P'OSITIOIlS S P'OSITIONS ., !' OSITIONS 3 P'OSITIOIlS 3 I'OSITIOIlS
IlEVENUE AUDITOR IlEVENUE AUDITOR IlE11EMUE AUDITOR IlEVENUE AUDITOR ElIM TECH I
II II II II - - - I- '-
0IlADE 17 0IlA0E 17 GRADE 17 0IlADE 17 0IlADE IZ
4 !' OS IT IONS 3 !' OSITIONS ., P'OSITIONS 5 P'OSITIONS I P'OSITION
TBA UNIT
EXAM TECH I EXAM TECH I E:< AM TECH I EXAM TECH I
~ - - -
GRADE 12 GRADE 12 IHlADE IZ 0IlADE 12
4 POSITIONS 4 POSITIOIlS 4 POSITIONS Z P'OSITIONS
I I
•... -------- ..... --- •.••.•••.•• - .. - AUD IT FUNC T IONS ---------- •....•....•.•..•........•. -.
T
o
___....__..... .. •... J.. I!!!!!!-.;;.. - I!!!____ ---- ~
- - _.. -._-----' .. _-_ ...
DEPARTMENT Of REVENUE
INDIVIDUAL INCOME TAX AUDIT SECTION
PRESENT ORGANIZATIONAL STRUCTURE
TEMPE
ADMINISTRATOR
INDIV. INCOME TAX
AUDIT SECTION
GRADE 23
1 POSITION
- -
EXHIBIT 15
-
REVENUE AUDIT I I REVENUE AUDIT
SUPV I SUPV I
§ I GItADE 19 GRADE 19
1 POSITION I POSITION
I
~ U REVENUE AUDITOIl REVENUE AUDITOR
III III
GRADE III GRADE III
7 POSITIONS II POSITIONS
REVENUE AUDITOR REVENUE AUDITOR
II II
1- 1
GRADE 17 GRADE 17
6 POSITIONS 5 POSITIONS
EXAM TECH I I EXAM TECH I
Y
GRADE 12 I ClIIADE 12
2 POSITIONS 2 POSITIONS
I .. ~--~---
V400R- 7
DEPARTMENT OF REVENUE
INDIVIDUAL INCOME TAX AUDIT SECTION
PRESENT INCOME TAX SECTION
TUCSON
EXHIBIT 16
~
I B
ADMINISTMTOIl
INDIV INCOME TAX
AUDIT SECTION
GMDE Z3
I POSITION
I
REVENUE AUDIT
UNIT
SUPV I
GRADE 19
I POSITION
I
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IIEVENUE AUDITOIl REVEIIU£ AUOITOIl REVENUE AUDITOIl EXM TECH I CLERK TYI'IST SECRETNty
III II I III
GIIAD£ 12 GIIAD£ 11
GRADE Ie GIIAD£ 17 GRADE 16 GRADE 11
< 4 POSITIONS 4 POSITIONS 1 I'OSITIOM 2 !' OSITIONS 2 !' OSITIONS 1 !' OSITION
- - - ~- .. - - - - - - .. - _.. - - -
~
a... t
DEPARTMENT OF REVENUE
INDIVIDUAL INCOME TAX AUDIT SECTION
PRESENT ORGANIZATIONAL SECTION
ADMINISTRATIVE SUPPORT
ADMINISTIlATOIl
INDIV INCOIlE TAll
AUDIT SECTION
GRADE 23
1 ~ OSITION
ADMINISTIlATIVE
SU~~ OIIT
SU~ V III
GRADE 17
I ~ OSITION
I I
ADMINISTIlATIVE ADMINISTIlATIVE ADMINISTIlATIVE
SUI'I'OIIT SU~ I'OIIT SU~ I'OIIT
SUI'V I SU~ V I SU~ V I
GllADE 14 GRADE 14 0IlADE 14
1 ~ ITIOIl I ~ OSITION 1 ~ 1TION
ACCOUNTING INFORMATION CLERK TY~ IST
TECH II ~ ItOCESSING III r-- r-- SU~ V I - GRADE 11 0IlADE 14 GllADE 11
1 ~ ITION 1 ~ ITION 3 ~ ITIONS
CLERK TY~ IST CLERK TY~ IST CLERK TY~ IST
III III II
f0- r-- -
GRADE 11 GRADE 11 0IlADE 9
4 1' 05IT IONS 4 ~ OSITIOIlS 2 ~ ITIONS
TEMPI!
CLERK TY~ IST CLERK TY~ IST
...... II '- II
GRADE 9 GRADE 9
6 ~ OSITIONS S I'OSITIONS
EXHIBIT 17
PHOENIX PHOENIX
V4DOR- 5
EXHIBIT 18
DEPARTMENT OF REVENUE
INDIVIDUAL INCOME TAX AUDIT SECTION
PROPOSED ORGANIZATIONAL STRUCTURE
TEMPE
I, ._._._. ._. ._. __ ._. . ft ._ ••• _. ._._. ••• • __ ._,
PHOENIX TUCSON
ADIUNISTMTIVE AOMINISTftATOII P' 1lOClIlAIl & P'ItOJECT
SECftETARY :[ INDIV INCONE TAX SP'EC IALIST II
AUDIT SECTION
0ftA0E 12 0ftA0E 23 OIIAOE 19
1 ,. OSITION 1 !' OSITION 1 !' OSITION
I I I I I I
AONINISTMTIVE ftEVENUE AUDIT ftEVENllE AUDIT ftEVENUE AUDIT ft£ VENUE AUDIT ftEVENUt: AUDIT IlEVENUE AUDIT
SU" P'OIIT SUP'V III UNIT U1IIT UNIT UNIT UNIT UNIT
SU,. V II SUP'V I SU,. V I SUP'V I SUP'V I SUP'V I
CJftAOE 16 0ftA0£ 2e 0IW:' f 19 eAADE 19 CJftAOE 19 CJftAOE 19 0lWlE It
1 !' OSITION 1 ,. OSITION 1 ~: ITION 1 ,. OSITION 1 I' 05ITION 1 I' 05ITION 1 1' 05IT 1011
!
ADMIN SUPPORT
PHOENIX/ TEMPE
~•
I
( PAGE 5 OF 5) ( PAGE 2 OF 5) ( PAGE 4 OF 5) ( PAGE 3 OF 5)
____....-......._-- 1_- 1_;- '-.-.. ..-~-,
- - - - - - -, .... .. - - - - - .. - - -
DEPARTMENT OF REVENUE
INDIVIDUAL INCOME TAX AUDIT SECTION
PROPOSED ORGANIZATIONAL STRUCTURE
PHOENIX
AONINISTRATOII
INDIV INCONE TAX
AUDIT SECTION
GAADE 23
I POSITION
I
" EVENUE AUDIT
UNIT
SUPV II
GAADE 2.
1 POSITION
EXHIBIT 19
~
-
, ....... "':::: I " EVENUl! AUDIT * " EVEIlUE AUDIT
21 UNIT UNIT UNIT
SUPV I SUI'Y I SUPV I
IIlADE 19 lJIIAD£ 19 lJIIAD£ 19
I POSITION 1 POSITION 1 POSITION
".....'"',... IH""...-.... IH ItEVENUE AUDITOII
III III III
GAADE IS lJIIAD£ 18 lJIIAD£ 18
2 POSITIONS 2 POSIT IONS 2 POS ITIONS
.."..,"",.. I " EVENUE AUDITOII " EVENUE AUDITOII
II II II
GAADE 17 lJIIAD£ 17 GAADE 17
3 POSITIONS 3 POSITIONS 3 POSITIONS
'-"~ J EXAII TECH I EXAII TECH I
GRADE 12 lJIIAD£ 12 GAADE 12
3 POSITIONS 2 POSITIONS 2 POSITIONS
I
~ - I
" EVEIlUE AUDIT " EVENUE AUDIT " EVENUl! AUDIT
UNIT UNIT UNIT
SUPV I SUPV I SUPV I
GAAD£ 19 GRAD! 19 lJIIAD£ 19
I POSITION I POSITION 1 POSITION
" EVENUE AUDITOII " EVENUE AUDITOII " EVENUl! AUDITOII
III III III
lJIIAD£ 18 lJIIAD£ 18 lJIIAD£ 18
2 POSITIONS 3 POSITIONS 3 POSITIONS
" EVENUE AUDITOII " EVENUE AUDITOII " EVENUE AUDITOII
II II II
GRAD! 17 GRADE 17 GRADE 17
3 POS IT IONS 2 POSITIONS 2 POSITIONS
EXAII TECH I
1 ~ EXAII TECH I EXAII TECH I
GftAD! 12 GRADE 12 GRADE 12
2 POSITIONS 2 POSITIONS 2 POSITIONS
1
IlEVEIlUf: AUDIT •
UNIT
SUPV I
lJIIAD£ 19
1 POSITION
IIEVEIlUf: AUDITOII
III
lJIIAD£ 18
3 POSITIONS
" EVEIlUf: AUDITOII
II
8RADt: 17
3 POSITIONS
EXAII TECH I
GRADE 12
2 POSITIONS
I
" EVENUE AUDITOII
III
lJIIAD£ 18
" POSITIONS
HEARINGS
UNIT
INDIVIDUAL INDIVIDUAL INDIVIDUAL INDIVIDUAL INDIVIDUAL INDIVIDUAL TBA UNIT
AUDIT
* NEW ' JNITS
AUDIT AUDIT AUDIT AUDIT AUDIT
, ~-
DEPARTMENT OF REVENUE
IND][ VIDUAL INCOME TAX AUDIT SECTION
PROPOSED ORGANIZATIONAL STRUCTURE
TEMPE
EXHIBIT 20
~
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~
ADIlINISTRATOR
INDIV INCOME TAX
AUDIT SECTION
GRADE 23
, I'OSITION
I
I I I I
REVENUE AUDIT * RI1VENUE AUDIT * REVENUE AUDIT REVENUE AUDIT
UNIT UNIT UNIT UNIT
SUI'V I SUI'V I SUI'V I SUI'V I
OIW) E " GRADE " GRADE ,.
1 I'OS ITION " I'OS IT ION 1 I'OSITION 1OII'WOS) EIT " ION
REVENUE AUDITOR REVENUE AUDITOR REVENUE AUDITOR llEVENUE AUDITOR
III III III III
'- - I-- - GRADE 18 OIW) E ' 8 OIW) E 18 eRAD£ 18
4 I'OS IT IONS 3 I'OSITIONS 3 I'OS I TIONS : I I'OSITIONS
REVENUE AUDITOR REVENUE AUDITOR REVENUE AUDITOR REVENUE AUDITOR
II II II II - - I-- I--
OIW) E 17 GRADE 17 GRADE 17 GRADE 17
2 I'OSITIONS : I I'OSITIONS : I I'OSITIONS : I I'OSITIONS
EXAlI TECH I EXAlI TECH I EXAlI TECH I EXAlI TECH I
I.- GRADE 12 - OIW) E 12 "- GRADE 12 - eRAD£ 12
1 I'OS I TION 1 I'OSITION 1 I'OSITION 1 I'OSITION
* NEW UNITS
..=,••""._-:~~- 1L ....~.. _ Ie
- -- -- .. -_ ... ---- ..... --
EXHIBIT 21
DEPARTMENT OF REVENUE
INDIVIDUAL INCOME TAX AUDIT SECTION
PROPOSED INCOME TAX SECTION
TUCSON
~,
I
ADMINISTIIATOR
INDIV INCOME TAX
AUDIT SECTION
ORADE Z3
I POSITION
I
REVENUE AUDIT
UNIT
SUPV I
GRADE 19
I POSITION
I
I I I I I I
REVENUE I REVEIIUl! AUOITOR REVENUE AUDITOR EXAM TECH I CLERIL TYI'IST SECRETARY
III II I III
GRADE 12 ClftADE 11
GRADE IlIAD! 17 GRADE 16 ClftADE 11
.. 1' OS11 .. 1' OSITIONS 1 !' OSITION 2 1' OSITIONS 2 1' OSITIONS I !' OSITION
V4DOR- l1
§
I
II
DEPARTMENT Of REVENUE
INDIVIDUAL INCOME TAX AUDIT SECTION
PROPOSED ORGANIZATIONAL SECTION
ADMINISTRATIVE SUPPORT
ADIUNISTRATOft
INDIV INCONE TAX
AUDIT SECTION
GRADE 23
I POSITION
ADMINISTIIATIVE
SUPPORT
SUPV III
GRADE 17
I POSITION
I I
AlIIUIIISTRATIVE ADIIINISTRATIVE ADIIIItISTRATlVE
SlII'I'OlIT SUPI'OlIT SlIl'l'OlIT
SlIl'V I SUPV I SlIl'Y I
llRADE I. GRADE I. llRADE 14
I POSITION I POSITION I POSIT 1011
ACCOUltTIIIG IIIFOIIIIATlOII CLERIl TYPIST
TECH II PIIOCESSIIIG III - r- SUPY I '-
ORAD£ 11 GRADE 14 llRADE II
1 POSITION 1 POSITIOII 3 POSITlOIIS
CLERIl TYPIST CLERK TYPIST CLERK' TYPIST
III III II - l- I.-
GRADE II GRADE 11 llRADE 9
4 POSITIONS • POSITIONS 2 POSITIOIIS
TEMPE
CLEIIK TYPIST CLERK TYPIST
II II - "-
GRADE 9 GRADE 9
6 POSITIONS • POSITIONS
EXHIBIT 22
PHOENIX PHOENIX
2 , 5 • 7 .. -- 7 _ .._ ",-_ 12 _
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OPPORTIJNITY COST OF MANUAL LEGAL RESEARQi
There are several sections within the Department of Revenue ( DOR) where personnel Involved In
various aspects of tax law require the research, analysis and Interpretation of legal Issues. Some current
procedures for performing legal research are Inefficient and reduce the productivity of various positions In
the Agency.
Tax PoI! cv Section
The Tax Policy Section consists of three units. The Policy Assistance Unit responds to taxpayers'
Inquiries by researching, analyzing and Interpreting tax law and Issues written ' etter Inqulrles-. The
Enforcement Assistance Unit reviews enforcement procedures and tax Issues and provides written
interpretation OegaJ briefs) to assist the Tax Protest Units In the Enforcement DMsion. The LegaJ Practices
and Procedures Unit is responsible for the promulgation of rules. The Tax Policy Section primarUy conducts
manual paper research in the library. Sometimes the Tax Polley Section has unlimited free access to
ArIzona State University's electronic legal research library through the University's two law student Interns
fulfilling their field practlcum at DOR. There are two electronic legal research library software systems
avaHabie for utilization by the student Interns. The WESTLAW and LEXlS systems are a computerized legal
research tools which lnable the user to query specific topics and quickly access tax Information.
Although the exact number of inquiries requiring legal research was not available, Tax Policy
personnel stated that they complete approximately 1,200 of these Inquiries per year In addition to their other
duties.
Hearings OffIce Section
The Hearings OffIce conducts hearings on taxpayers' petitions for review of tax assessments made
by the Department and Issues written decisions on the propriety of assessments. These written decisions
require manual paper research of legal Issues. Hearings OffIce staff udlze the electronic legal research
system at the Capitol Ubrary. The Capitol Ubrary charges DOR $ 3.00 per minute and 2.5 cents per line for
cOmplJler pilnt- ou'ts.
DOR - 67
Tax Policy
TABLE 1: FTE TIME DEVOTED TO MANUAL LEGAL RESEARCH
The Hearings Office has four FTE positions spending approximately 30% of their time conducting
manual legal research.
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$ 40,242
$ 13,414
$ 53,656
$ 37,223
$ 170,290
$ 46.506
$ 254,019
$ 20.23/ hr. X 920 hrs. = $ 18,611 X 2 =
$ 18.51/ hr. X 920 hrs.= $ 17,029 X 10 =
$ 16.85/ hr. X 920 hrs.= $ 15,502 X 3 =
$ 24.3O/ hr. X 552 hrs. = $ 13,414 X 3 =
$ 24.30/ hr. X 552 hrs. = $ 13,414 X 1 =
2 Tax AnaI. 111' s
10 Tax AnaI. II's
3 Tax Anal. " s
920 hrs. X15 FTE = 13,800 hrs.
DOR - 68
3 Hear. Off.
1 Admin.
552 hrs. X4 FTE = 2,208 hrs.
In 1989, DOR personnel considered purchasing a compact disc ( CD ROM) tax law library system
and contacted a local computer software company to explore software acquisition. However, the CD ROM
tax library system did not contain ArIzona Tax Law or a Property Tax component. DOR's efforts to obtain
the CD ROM software were discontinued.
Tax Policy has 15 FTE positions spending approximately 50% of their time conducting manuallegaJ
research. ( Based on 1,840 actual annual work hours per person.)
There Is an opportunity cost to the Department of Revenue for manual legal research. Manual
compared to automated legal research Is Inefficient, consumes more man- hours which reduces productivity,
and limits the amount of tax law Information/ sources avalable to personnel making legal rulings or preparing
for litigation.
Hearings Office
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• Total Hours of Research, Analysis & Interpretation = 16.008 or 8.7 FTE
• Total Value ( Research, Analysis & Interpretation) = $ 307,675.
We support DOR's desire to purchase Tax Law Ubrary software on compact disc ( CD- ROM) to
conduct legal research.
We also recommend the elimination of one Tax Analyst I ( Grade 21) In Tax Policy.
• Legal research software will increase productivity and reduce related manual procedures by
50%. Current annual backlogs of 60 Inquiry letters will be reduced and service levels to
taxpayers will dramatically Improve. This recommendation will effectively Increase the
productivity in the Tax Policy Section and the Hearings Office and increase the amount of time
available to accomplish the additional duties detailed below.
- The Tax Polley Administrator plans to devote the additional time gained to provide more
Information to the taxpayer, such as a Summary of ArIzona's Taxpayer's Bill of Rights;
produce more administrative tax policies and procedures; and shorten the response time to
taxpayers In issuing responses to Inquiries and preparing rules
- The Hearings OffIce Administrator plans to devote the additional time gained to Increase the
accuracy and shorten the response time In Issuing legal decisions
• Legal research software wli simplify legal research by Integrating materials In an Index which can
be queried and cross- referenced
• Legal research software wUl pravide COR with system enhancements in addition to case law
such as minute entries, up- to- date Information on statutes, newly enacted legislation, recently
reported court rules and orders
DOR - 69
• Legal research software Is compatible with DOR personal computers and word processing
software
• Legal research can be conducted within DOR and wli reduce the amount of staff time spent
away from the work area
• Computer hardware costs wli be minimal because DOR already has personal computers to
utUlze legal research software
• The legal research software wli provide the monthly updates on case law, statutes, regulations
and rulings to DOR personnel Issuing letter rulings, legal briefs or to assist DOR in preparing for
appeals and litigation
• The legal research tools will be accessible to all DOR personnel conducting research through
a LocaJ Area Network.
It is important to note that one aspect of conducting legal research will not be impacted by the
addition of the CD ROM software. Tax Polley and Hearings Office staff will continue to have to leave their
work areas to access specific tax cases through the WESTLAW or LEXJS systems.
COST/ BENEFITS OF COMPUTERIZED TAX LAW UBRARY
Annual Savings
One Tax Analyst I + 22.5% ERE = $ 47,535
Annual Savings = $ 47,535*
* Iess current WESTLAW/ LEXJS costs spent ( Unable to be determined)
DOR - 70
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DOR - 71
Compact Disc ( CD ROM) Player $ 600
• Identify desired system features ( i. e., Estate Tax, Corporate Tax, Federal Income Tax etc.) .
S850jyr.
$ 425jyr.
$ 295jyr.
$ 1,795
$ 45,740
$ 22500.
Annual Costs
Net Annual Savings
Estate & Property Tax)
Federal Tax Service Software ( basic)
Revenue Ruling and Procedures
IRS PUblication on CD's
• Coordinate the purchase of a legal research software with DOR's Data Management personnel,
selected Computer Company and DCA Purchasing Office ( Requests For Bids, etc,).
Annual Costs
One- Time Cost
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PMSION CONSQUDATION
The Department of Revenue has six divisions:
• Taxpayer Information and AssIstance
• Tax Enforcement
• Data Management
• Property Valuation
• Admlnlstratlve8ervlces,
• Oversight and Analysis
The dMslons of ( 1) Administrative Services and ( 2) Oversight and Analysis contain 165 employees
with 15 sections and an average of 11 employees per section. The nine Oversight and Analysis sections
have less than nine FTE positions per section ( see Exhibits 27, Administrative Services, Present
Organizational Structure through Exhibit 34, Purchasing Section, and Exhibit 40, Oversight & Analysis,
Present Organizational Structure through Exhibit SO, Econometrics Section, Present Organizational
Structure). The units of both dMslons serve as administrative and program support for the larger line
divisions of Tax Enforcement and Property Valuation, as well as Data Management, and to some extent
provide support for the operational oversight of the Deputy Director's office.
As recently as 1991 the Agency was organized Into five dMsions Instead of the present six. Most
sections of the new Oversight and Analysis DMslon were previously located In either the Administrative
~-_..:_-- n;.. t_ I .. __.... =__-.... 1 .. aM........._ n __. I'fot., nl. I'V"' Wt"".. 1ft + hft nlpal" ltl'\ r'~ 1" dfi" 1:: Jj
~ al¥ l~ "" Y'~ IUII VI a~ I~ llgu "' 1." UIV ,", vtJU'J ..,. IIVVLUI III .." g .., uuw.. w' ' iii' ...,.... vw.
When reviewing the administration and work activities of the two divisions of Administrative Services
and Oversight and Analysis, a number of findings point to the potential for fewer management positions and
a broader span of control:
• Relatively high structyre to the work environment: For the most part, position functions and
responsibUItles In these two dMsIons are clearly defined and structured, requiring litUe guidance
or corrective action from management
DOR - 72
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• Standardized and routine services: Most services provided by these two dMslons are those
which are provided In any large reglAtory agency ( accounting, procurement, physical
properties and records management, pubilcatJons, administrative hearings, and s1mBar others).
Standard methods and procedures are used In carrying out objectives
• Low need for coordination between subordinates: Most sections are structured to function
Independently c: A each other and require little coordination on a day- tCHiay basis
• Use of organizational structure to provide oromotIonaI opportunities: As Is true In many areas
of state government, limitations - over the years - on pay Increases and Inftexlble job
classifications may have resulted In the creation of supervisory and managerial positions as
personnel rewards and Incentives.
WIthin the Administrative Services DMslon, three of the six sections reporting to the DMslon Director
are especially small:
• FacUlties Management, with three line employees headed by an administrator at a Grade 17
• Estate Tax and Fldyclary, with six line employees headed by an administrator at grade 14
• Pyrchaslng, with four line employees headed by an administrator at a grade 21.
Within Oversight and Analysis Division tour sections are exceptionally small:
• Hearings, with three line positions
• Centra! Information Serylces with two line positions
• Management AnalYSis with two line positions
• Econometrics with three line positions
DOR - 73
When reviewing the missions and the actual work activities of the entire agency, Including the
operational oversight over the dMslons provided by the deputy director, some appear out of alignment with
normal business unit structure.
• CentraJ Information ServIces within the 0 & A DMsIon functions as an Independent
liaison/ coordinator/ troubleshooter between data processing personnel and the Property
Valuation DMsIon and the various County Assessors to ensure that the needs of the users are
understood by the data prOC888ing personnel. and the technical aspects and capablities of data
processing are understood by the users
• Taxation System Support within the 0 & A DMslon serves as data processing quality control
for taxation systems and provides Impact analysis for proposed data systems, systems
eventually established by the Data Management DMslon. It also functions as an Independent
liaison between data processing personnel and the users ot the non- property tax systems
• The 0 & A section of Bingo administers licensing and report processing slmUar to other special
tax administration. All other special tax administration ( those not associated with the - Big Four­ot
Individual Income, Corporate Income, WIthholding and Sales) Is handled within the
Administrative Services DMllon
• Management Analysis Is the smallest section In 0 & A, but Is separate from Internal Audit both
of which are a research and analysis function. Together with Tax Polley and Econometrics, all
relate to Agency operational oversight aetMtles cutting across all divisions, aetMtles normally
administered by an agency deputy director
• Community Activities/ Publications Is a section Involved In providing educational and
Informational materials and presentations to the public and the accounting community as well
as throughout the agency
• WhUe the Hearings Section could be administered at any organizational location away from the
tax polley decision, the fact that this section provides the 1st level review, with the Director's
OffIce providing the appeal review, suggests that this office Is best considered a support
function organizationally distant from both tax decision and second level appeal.
DOR · 74
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In summary, consolidation and realignment opportunities can permit DOR to effect cost savings In
both Division management and section administration.
A review of the 15 sections' responslblltles and duties, and a comparison of the operating
objectives and missions of the two dMslons clearly Indicate an over- specialization of functJons and
corresponding organlzational units. The resth Is that an excessive. number of administrative units are In
place In each dMslon, each with Individual managers and supervisors; some units have only marginal
distinctions between their respective objectives.
Overall, the ratio of management/ supervisory positions to line employee positions Is unusually high:
1 to 3.9. Individually, the two dMsions' ratios are as follows:
• Administrative Services DMslon: 1 to 4.4
• Oversight and Analysis DMsion: 1 to 3.3.
Even though some of the section managers' positions are at relatively low grades, the low ratios
produce a significantly high cost of management for each dMslon. In the two dMslons combined, $. 46 Is
spent on management/ supervision for every dollar spent on labor Olne employees).
We recommend implementation of the following Improvements: ( see Table A, Proposed DOR
DMsion Consolidation)
• Merge selected individual sections with s1mlar operational objectives Into one unit. In this
connection, merge the Management Analysis Section with the Internal Audit and Investigations
SectIon and transfer the naw combined unit to the Deputy Director's Office ( see exhibit 24,
Department of Revenue, Proposed Organizationai Structure).
this change will align two closely related functions ( audit and analysis) and merge two small
administrative units.
DOR - 75
• Transfer Taxation Systems Support ( TSS) and Central Information Support ( CIS) from the
Oversight and Analysis Division to the Taxpayer Support DMsIon. This move maintains their
Independent position In a neutral division but also serves to move TSS closer to Taxpayer
Information and Assistance which often receives the first Indications ci potential systems
problems ( see exhibit 24, Department ci Revenue, Proposed Organizationai Structure)
• Consolidate the two small units of Purchasing ( contains four line employees) and Faclltles
Management ( contains three line employees) with a third section ( Records Management). All
of these sections are presently located within the Administrative Services Division. This
combines small sections within a larger one and aligns all physical property management under
one administration ( see exhibit 6, Procurement and Faciltles/ Records Section, Proposed
Organizational Structure - Administrative Services Division)
• Transfer the small section called Estate Tax and Fiduciary, as a separate unit, to the
Comptroller's OffIce; this aligns this tax collection effort with the other special tax areas already
under the direction of the Comptroller ( see exhibit 5, Comptroller's OffIce, Proposed
Organizational Structure)
• Transfer the Bingo Tax Collection Section from the Oversight and Analysis DMslon to the
Administrative Services Division. This aligns the special tax collections functions but also
establishes Bingo with Its necessary high profile compared to other special taxes ( see exhibit
35, Administrative Services Division, Proposed Organizational Structure)
• Transfer the Community Activities and Publications Section from the Oversight and Analysis
Division to the Taxpayer Support Division ( see exhibit 24, Department of Revenue, Proposed
Organizational Structure). This aligns the section with other taxpayer Information functions
• Relocate the Oversight and Analysis Hearings Section, providing Independentadministrative due
process for taxpayers, to the Administrative Services Division ( see exhibit 24, Department of
Revenue, Proposed Organizational Structure)
• Transfer the two sections remaining In the present Oversight and Analysis Division to the Deputy
Director's OffIce. These are Econometrics and Tax Policy. These sections, like the audit and
analysis functions, aid In providing review and policy direction for all divisions ( see exhibit 26,
Special Support, Proposed Organizational Structure).
DOR - 76
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These recommendations Integrate the functions of the Oversight and Analysis DMslon ongoing
Agency functions:
• Staff support of the Deputy Director's operational oversight function
• Dissemination of Information to the taxpayer public In the Taxpayer Support Division
• Oversight and policy direction from the Deputy Director's OffIce
• Coordination with data users and data processing functions within the Taxpayer Support
DMslon.
• Comprehensive administrative support rendered by the Administrative Services DMslon
WIth this Integration, together with the consolidation of some units within the sections already
referenced, the following Improvements can be achieved:
• The overall ratios of management to line employees can be Increased
• Spans of control for IndMduai managers and supervisors can be expanded. thus more
efficiently administering programs and reaching objectives
• Administrative support functions will be aligned with the Administrative Services Division
• Other sections. formerty associated with the Oversight and Analysis DMslon. will be
appropriately aligned with line divisions or operational management areas
• The cost to manage Is reduced from $. 46 to $. 39 for fNery dollar spent on labor. This Is a
nominal reduction of 15 percent. Organizations typically have a cost to manage between $. 20
to $. 30. WIth this In mind, recommendation Implementation actions may rweal further
opportunities to reduce the cost to manage.
DOR - 77
• Communicate realignment to Department of Revenue employees who wUl be affected by
changes
Additionally, cost savings can be realized, as follows:
One Administrative Secretary I ( grade 12)
( from staff support to the Oversight & Analysis
Assistant Director)
One Records Management Supervisor ( grade 17)
( from a section merged with another)
One Executive Staff Assistant ( grade 20)
( from staff support to the Oversight & AnalysIs
Assistant Director)
One AssIstant Director ( grade 26)
( from Division Management In Oversight & Analysis Division)
Total
• Develop detaUed organizational Integration plan
• Submit plan to DOA Personnel
• Implement plan.
DOR - 78
$ 23,214
$ 33,066
$ 43,254
$ 14,976
$ 174,510
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TABLE A: PROPOSED COR DIVISION REORGANIZATION
Divhion Unit Recommended Action: Transfer/ Merge Comments FTE Action Required
O'Slght t Analysis Community Action & Pub. Transfer to Taxpayer Support
O'Slght t Analysis Econometrics Transfer to Deputy Director
O'Slght t Analysis Hearing Office Transfer to Admin. Services Dlv.
O'Slght I Analysis 81ngo Transfer to Admin. Services Dlv.
0' SI ght I Analysis Tax Polley Transfer to Deputy Direclor
O'Slght t Analysis Tax System Support Transfer lo Taxpayer Supporl
O'Slght I Analysis Central Info. Services Transfer to Taxpayer Support
O'Slght Analysis Management Analysis
Transfer both units to Depuly Director
Internal Audltl
O'Slght & AnalYsis Investigations Merge these two units
Merge w/ Procurement & Create new Procuremenl!
Admlnlslr'atlve 5vcs Records Management Facl lilies Managemenl Records/ Facll Illes Mgml. Unll
Merge w/ Procuremenl & Creale new Procurement! Eliminate ( I) FTE In
Admlnlstcative 5vcs Facilities Management Records Managemenl Records/ Facilities Mgmt. Unit Records Management
Administrative Svcs Estate Tax & Fiduciary Transfer to Complrol ler's Office
Merge w! Records Managemenl & Creale new Procurementl
Admlnlst'" atlve Svcs Purchasing Faci I Itles Management Records/ Facll Illes Mgmt. Unit
Eliminate ( l) A. D.
( I) Exec. Assistant
O'Sighl & Analysis Eliminate Division Management ( I) Admin. Secrelary
STATE OF ARIZONA EXHIBIT 23
DEPARTMENT OF REVENUE
PHESENT ORGANIZATIONAL STRUCTURE
DIItECTOII EXECUTIVE ASSISTANT
OENEML COUNSEL
OI'F ICE 01' THE LEGISLATIVE LIAISON
DIItECTOII ~ UBLIC INFORMATION
OI'FICEIt
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DE~ UTY DIItECTOII AFFIRMATIVE ACTION
ONBUDSMAN
S~ ECIAL SU~~ T ~ EItSONNEL
~ LANNING AND
BUDGET
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ASSIST DIItECTOII ASSIST DIItECTOII ASSIST DIItECTOII ASSIST DIItECTOII ASSIST DIItECTOII ASSIST DIItECTOII
ADMINISTMTIVE DATA ~ ItOPEItTY VALUATION TAll TAX~ AYEIt OV£ ltSIGHT
SUVICES NAIlAGEIfENT I EOUALIZATION ENFOIICEMENT SU~~ OIIT & ANALYSIS
-- I HEARl... OfFICE
C~ TItOLLEit TAX ~ ItOCESSING ~ ItOl'EItTY COLLECTIONS TAX~ AYER IIll'O
r-- - - VALUATIOIl f- l- I ASSISTANCE
~ INTEltIlAL AUDITI - CRIIlIIlAL
I INVESTIGATIONS
! FACILITIES SYSTEII$ I ASSESSII£ NT SALEs/ USE ACCOUNTS - MAJIAOEIIENT f- ~ ItOGIW. UIIG - STANDARDS f- TAX AUDIT - ItECEIVABLE
I EQUALIZATION
IWIAClEIIENT
I"'"" ~ LYSIS
ItECOIIDS SYSTEMS INDIVIOUAL LICENSE I
- MANAGEMENT I- ENGINEEItING I- INCOME TAX AUDIT - IIEGISTMTION -- I ECOIIONETIIICS
ESTATE TAX DATA ~ IIOCESSING COII~ OItATE ~ ENALTY TAX
l- I FIDUCIAllY - Ol'EMTIONS L-. INCOME TAX AUDIT - ItEVIEW - ~ LICY
CONIIUNITY
TMINING TECHNICAL - ACTIVITIES I
f- - SU~~ OIIT ~ UBLICAT IONS
- CENSTYMSLTEIIINSFO
~ UIICHASING INFORMATION
L-. - CENTEIt
1 TAXATION
SYSTEMS
SUPPORT
DATABASE - ~ PLICATIONS
- ~ .-.;, - - .=- - l; P- -_'. 7 - I_ .- - .... - ~: LII - - - -
- - - - - - - - - - - - - .. - - - - -
~
C.. l. D.
STATE OF ARIZONA
DEPARTMENT OF REVENUE
PROPOSED ORGANIZATIONAL STRUCTURE
DIRECTOIl EXECUTIVE ASSISTANT
GENERAL COUNSEL
OFF ICE OF THE LEGISLATIVE LIAISON
DIRECTOIl PUBLIC INFORMATION
PLANNING I BUDGET
PERSONNEL
TAX POLICY
DEPUTY DIRECTOIl AFFIRMATIVE ACTION
ONBUDSMAN
SPECIAL SUPPOIlT ECONOMETRICS
INTERNAL AUDIT/
ANALYSIS AND
INVESTIGATIONS
r r I I
ASSIST DIRECTOIl ASSIST DIRECTOIl ASSIST DIRECTOIl ASSIST DIRECTOIl ASSIST DIRECTOIl
ADIlINISTRATIVE DATA PROPERTY VALUATION TAX TAXPAYER
SERVICES MANAGEMENT I EQUALIZATION ENFOIlCEMEMT SUPPOIlT
COMPTROLLER TAX PROCESSING
~ I- PROPERTY COLLECT IONS TAXPAYER INFO
~ VALUATION ~ l- I ASSISTANCE
PROCUREMENT/ SYSTEMS I
~ RECORDS I- PIlOOlIAIIIIING ACCOUNTS
fACILITIES MGllT ASSESSMENT SALES/ USE I- RECEIVAlILE
L- STANDARDS I- TAX AUDIT
I EQUALIZATION
TRAINING SYSTEMS
l- t- ENGINEERING LICENSE I
~ REGISTRATION
INDIVIOUAL
I- INCOME TAX AUDIT
HEARINGS DATA PROCESSING
l- t- OPERATIONS PENALTY
I- REVIEW
COIlPORATE
I- INCONE TAX AUDIT
TECHNICAL
I- BINGO ~ SUPPOIlT CONIIUNITY
I- ACTIVITIES/
PUBLICATIONS
INFORMATION
!- CENTER CENTRAL
I- INFORMATION
SERVICES
DATABASE
'-- APPLICATIONS TAXATION
I- SYSTEMS
SUPPORT
EXHIBIT 24
V4DOR- 2
~---- j
II i
1 I
DOR - 82
- - •• - - .. - - - - - - - - - - - - -
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STATE OF ARIZONA
DEPARTMENT OF REVENUE
SPECIAL SUPPORT
PROPOSED ORGANIZATIONAL STRUCTURE
IJEPUTY DIRECTal
SECRETARY
Sl'ECIAL ! ilJ'PlJlT -
I
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IImNW. AFf_ nw: T~ T. AIIIITI AIlALYSIS
IoCTIC

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Copyright to this resource is held by the creating agency and is provided here for educational purposes only. It may not be downloaded, reproduced or distributed in any format without written permission of the creating agency. Any attempt to circumvent the access controls placed on this file is a violation of United States and international copyright laws, and is subject to criminal prosecution.

I GV80.2: R38
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STATE OF ARIZONA
PROJECT S. LI. M. REPORT ON THE
DEPARTMENT OF REVENUE
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DEPARTMENT OF REVENUE
PROJECT SUM
TABLE OF CONTENTS
EXEa111VE SlM~ 1
fIECOMMENlATIONS
Comptroller's OffIce - FlnanclaJ S8rvices StaffIng ...........•......................... 19
Micrographics - Income/ Corporate Fles 24
Additional Attorney Position .........................•.................•.. . . . . . . 27
Armored Car Pickup Schedule .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Clerical Support - Taxpayer Information & AssIstance 32
Reassign Quality Control Function to Una Units 36
sates Tax Ucense Enforcement 41
CorpOrate Audit Restrudui6 0 43
Withholding Tax Transfer 49
Quality Control Functions - AD's Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Individual Income Tax Audit 54
Opportunity Cost of Manual Legal Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
DMslon Consolidation ...................................•.................... 72
EXHIBITS
1. SUM Interview Ust - Department of Revenue ( DOR) 13
2. Department of Revenue - Summary of Recommendation TItles and Savings 17
3. Department of Revenue Implementation Schedule 18
4. Present Comptroller's OffIce, 1992 Organizational Structure 22
5. OffIce of the Comptroller, Proposed Organizational Structure ................•....... 23
6. Procurement and Facllties/ Records SectIon. Proposed Organizational Structure 26
7. Caseworker Clerical Support, Present Work RaN Process . . . . . . . . . . . . . . . . . . . . . • . . . . . 34
8. Caseworker Clerical Support, Proposed Work RaN Process .. . . . . . . . . . . . . . . . . . . . . . . . 35
9. Caseworker Quality Control, Present Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10. Caseworker Quality Control, Proposed Process 40
DEPARllENT OF REVENJE
PROJECrSUM
TABU: OF CONTENTS
fXHIBITS
11. Division of Tax Entorcement - Corporate Audit SectIon, Present Organizational Structure ... 47
12. Division of Tax Enforcement - Corporate Audit SectIon, Proposed Organizational Structure . . 48
13. Individual Income Tax Audit SectIon, Present OrganlzatlonaJ Structure ......•........... 57
14. Individual Income Tax Audit SectIon - Present Organizational Structure, Phoenix ...•..... 58
15. Individual Income Tax Audit SectIon - Present Organizational Structure, Tempe ....•..... 59
16. Individual Income Tax Audit SectIon - Present Organizational Structure, Tucson 60
17. Individual Income Tax Audit Section, Present Organizational Structure,
Administrative Support 61
18. Individual Income Tax Audit Section, Proposed Organizational Structure 62
19. Individual Income Tax Audit Section - Proposed Organizational Structure, Phoenix 63
20. Individual Income Tax Audit Section - Proposed Organizational Structure, Tempe 64
21. Individual Income Tax Audit Section - Proposed Organizational Structure. Tucson 65
22. Individual Income Tax Audit Section. Proposed Organizational Structure.
Administrative Support 66
23. Department of Revenue, Present Organizational Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
24. Department of Revenue, Proposed Organizational Structure 81
25. Special Support, Present Organizational Structure 82
26. Special Support, Proposed Organizational Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
27. Administrative Services. Present Organizational Structure 84
28. Administrative Services, Present Organizational Structure ( Functional) . . . . . . . . . . . . . . . . . . 85
29. Administrative Services - Comptroller's Office, Present Organizational Structure 86
30. Administrative ServIces - Records Management, Present Organizational Structure . . . . . . . . . 87
31. Administrative ServIces - Faclltles Management Section, Present Organizational Structure .. 88
32. Administrative ServIces - Estate Tax & FIduciary, Present Organizational Structure 89
33. Administrative Services - Training SectIon, Present Organizational Structure . . . • . . • . . . . . . 90
34. Administrative ServIces - Purchasing SectIon, Present Organizational Structure . . • . . . . . . . . 91
35. Administrative Services DiVIsIon, Proposed Organizational Structure 92
36. Administrative Services Division, Proposed Organizational Structure ( Functional) 93
37. Administrative Services DMslon - Training Section, Proposed Organizational Structure 96
38. Administrative Services DMslon - Hearings OffIce, Proposed Organizational Structure . . . . . . 97
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DEPARTMENT OF REVENUE
PRO. ECT SUM
TABLE OF CONTENTS
EXtIBfTS
39. Administrative Services Division - Bingo Admlnlstratloti,
Proposed Organizational Structure . . . . . . . . . . . . . . • . . . . . . . . . . . . . . . . . . . . . . . . . 98
40. Oversight & Analysis, Present Organizational Structure . . . • . . . . . . . . . . . . . . . . . . . . . . . . . 99
41. Oversight & Analysis, Present Organizational Structure ( Functional) . . . . . . . . . . . . . . . . . . . 100
42. Oversight & Analysis - Community ActIvItIes and Publications Section,
Present Organizational Structure 101
43. Oversight & Analysis - Management Analysis, Present Organizational Structure . . . . . . . . .. 102
44. Oversight & Analysis - Internal Audit/ Criminal Investigations,
Present Organizational Structure 103
45. Oversight & Analysis - Taxation Systems Support, Present Organizational Structure 104
46. Oversight & Analysis - Central Information Services ( CIS),
Present Organizational Structure 105
47. Oversight & Analysis - Hearings OffIce, Present Organizational Structure 106
48. Oversight & Analysis - Bingo Section, Present Organizational Structure 107
49. Oversight & Analysis - Tax Policy Section, Present Organizational Structure .....•...... 108
SO. Oversight & Analysis - Econometrics Section, Present Organizational Structure 109
•
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July 2,1992
Mr. Paul Waddell
Director
Arizona Department of Revenue
1600 West Monroe
Phoenix, AZ 85007
Dear Mr. Waddell:
We have completed the Governor's Statewide Long- Term Improved Management ( SUM) review
of the Arizona Department of Revenue ( DOR), and are pleased to present to you our report of findings and
recommendations. Our analysis was conducted from March 1992 through May 1992.
This summary describes the objectives of the review, the approaches used throughout the
analysis, and the major changes recommended as a result of the study. We have quantified the potential
benefits and summarized the key Implementation tasks, Including legislative support needed to Implement
proposed recommendations Into actual benefits. Our detailed findings and recommendations follow this
summary.
The total recommendations identify approximately $ 6.4 million In benefits, including $ 6.1 mUlion
in revenue enhancement, and $. 3 million In general savings.
OBJECIJYES AND GOALS
The overall objective of this study was to find ways to Improve the delivery of services In DOR.
using various business analysis and Total Quality Management ( TQM) techniques. Our goal was to
streamline processes and unnecessary work, Improve systems and procedures. and realign groups with
slmlar functions to deliver services more effectively at a lower cost
We approached this study by taking an Integrated view of the organization. For each area, we
reviewed the mission and strategic focus; product/ process delivery methodology; process technology;
Mr. Paul Waddell, Director
Department of Revenue
Page 2
methods for USIng and managing Information; performance measurements; quality service Issues and
measurements; organizational structures; and the logistics and physical assets used by the organization to
deliver products and services.
We began by using the shelf data provided to us by DOR to become famliar with the mission,
size, structure, and responslbHlt1es of the major areas of the Agency. We conducted IntervIeWs with all levels
of supervision and select technical and line personnel to enable us to focus on areas which could be
Improved. Where appropriate. we used Interviews to develop detaled process flows which enabled us to
identify non- value added elements that could be eliminated. During the course of our review, we conducted
over 135 Interviews of Agency and external personnel ( see exhibit 1, SUM Interview Ust - DOR).
In addition to developing process flows. we employed the following analytical techniques:
• Quantification of cost to provide a quality service or product where It appeared the cost
could be reduced
• Identification of prevention activities ( upstream) to reduce more costly faUures further in the
process ( downstream)
• Assessment of the organizational structure Including consideration of the following issues:
Span of control
Managerial layering
Alignment of missions
Distribution of responslbUlties
Fragmentation of duties
Overlapping or redundant functions.
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Mr. Paul Waddell, Director
Department of Revenue
Page 3
Our first step In analyzing the organization Involved Identtfylng opportunities for streamlining
processes and modifying practices to Improve performance provided by the various units. Once this
streamlining was completed, we reviewed the remaining units to assess their organizationai placement and
structure. Finally, organizational changes are proposed to achieve alignment of missions; appropriate spans
of control; reduced layering to achieve organizational ftexlbllty and empowerment at the lower layers of the
organization; and elimination of duplicative and fragmented duties.
In order to quantify the effects of making changes, we obtained time estimates for work
requirements. In addition, we used Agency avalable statistics to assess the variety and volume of
transactions processed by an area.
As recommendations were developed, we reviewed the proposed changes with appropriate
supervisors and managers to determine completeness of the analysis. In · addition, we met with senior
Agency management to review our findings on a regular basis.
SUMMARY FINDINGS & RECOMMENDATIONS
Potential opportunities for Increasing revenues and effecting cost savings can be realized by
streamlining various processes, and modifying procedures and approaches to conducting business.
Additional savings can be achieved by reorganizing the units to align missions; reduce duplicative efforts;
develop appropriate spans of control; and reduce layering. exhibit 2, Summary of Recommendation, Titles
and Savings, shows the summary of savings for each of the analyses performed.
Opportunities for Revenye Enhancement
Approximately one- half of our recommendations relate to opportunities for enhancing revenues.
These recommendations are entitled as follows:
• Additional Attorney Position
• Sales Tax Ucense Enforcement
Mr. Paul Waddell, Director
Department of Revenue
Page 4
• Corporate Audit Restructure
• WIthholding Tax Transfer
• Quality Control Functions - AD's OffIce
• IndMduallncome Tax Audit
• We believe establishing another OCR Attorney Position In the Attorney General's office will
enable the Agency to recover up to $ 1.98 mUlion In the current case backlog for an
investment of $ 55 thousand, per year
• The Sales Tax Ucense Enforcement recommendation Increases the number of sales tax
license positions by three. enabling those positions to bring on- line potential licensees. This
should result in annual net revenue enhancements of approximately $ 280 thousand
• Under Corporate Audit Restructure. through the reclassification and/ or establishment of new
positions, a greater audit capacity Is created so as to result In Increased revenues. The
projected revenue enhancement has been estimated at $ 1.95 mUlion
• The transfer of the Withholding Tax program to the Department of Economic
Security/ Unemployment Insurance frees up two Field Auditors · enabling them to work on
income production In the Sales and Corporate Audit sections. This wli resutt in increased
revenues of approximately $ no thousand
• Restructuring the Quality AssUrance function in the Tax Enfprcemem Assistant Director's
Q: f!!. Qi wli resutt In the freeing up of one Revenue Field Auditor position. This position when
reassigned to Sales Audit should generate some $ 420 thousand a year In collections
• Establishing four additional units frees up two Revenue Auditor positions enabling the
Individual Income Tax Audit section to realize an average $ 353 thousand In collections per
auditor ( per current statistics) for a total of $. 7 mUlion.
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Mr. Paul Waddell, Director
Department of Revenue
PageS
In all, these revenue enhancing recommendations wli resUt In an additional $ 6.1 mliion dollars
being realized by the Department of Revenue for the State of ArIzona.
Division Consolidation
It is our understanding that the DMslon of Oversight & Analysis has been In existence less than
two years. The sections and units reporting to It previously were disbursed among several other dMsions
and areas within DOR.
In our opinion, the creation of a separate dMslon to house these diverse functions is not justified
from eitheran organizational or cost/ benefit stand- point. We recommend redistributing the various functions
among the Administrative Services, and Taxpayer Support Divisions as well as the Deputy Director's Office.
This recommendation results In the elimination of one Assistant Director position, one
Manager/ Supervisor position and two Executive Assistant positions and pertains to organizational alignment
and not to personnel placement.
The recommendation will result In an annual savings of $ 174,000.
OpPOrtynlty Cost - Lega! Research
Several sections within DOR are required to conduct research, analysis and Interprstatlon of
existing State tax laws. At present, this research Involves prlmarly manual Investigation off- site at various
libraries or via electronic research facllties avalable at ArIzona State University and the CapItol Ubrary.
We recommend that DOR acquire Tax Law Ubrary software on compact disk and InstaJIIt on one
or more local area networks ( LAN) within the Department. The software is avalable for lease for under
$ 3000! year; the one- time cost of the Compact Disk Is $ 600.
We have estimated that some 16,008 hours are spent annually In the research, analysis and
Interpretative functions. Assuming that one- half of this amount represents the research function, and
Mr. Paul Waddell, Director
Department of Revenue
Page 6
reeI& zIng that a large percentage of this time can be reinvested to I' 88lIze benefits In Increesed productivity,
we estimate an annual opportunity savings to the Department of $ 47,000. Factoring In the software and
hardware expenditures, this nets out to $ 45,000! year In savings.
ComDlrolIe( s OffIce - Financial SeryIces StaffIng
The ratio of supervisors to staff In the Financial ServIce Unit Is high. The reconcIlation area has
a ratio of 1: 3; the expenditure area has a ratio of 1: 4; the checks/ warrants and surplus property areas have
a ratio of 1: 2. Additionally, a ratio of 1: 2 supervisor/ supervisor exists for the unit overall.
We recommend revising the organizational structure of the Financial Services Unit In the
Comptroller's OffIce and eliminating one of the two second level supervisors.
Consolidation of revenue and expenditures functions under one supervisor will result In the
elimination of one Fiscal Services Specialist for a savings of $ 30 thousand/ year.
MicrograPhics - Income/ Corporate FUes
The Records Management Section within the Administrative Services DMsIon Includes three
sections: Micrographics, Income and Corporate Flss, and the Warehouse. Two of the three sections have
closely aligned functions. Both are small and each has Its own supervisor. The Micrographics unit Is staffed
by a supervisor and two leads.
In effect, there are four positions contributing to the supervision of seven full- time and two part­time
employees.
We recommend eliminating one of the two Administrative Support Supervisors and merging the
Micrographics and Income/ Corporate Fles sections. The resUtlng unit would have seven line employees
of which two would be leads assisting In work scheduling and monitoring, and one supervisor.
Cost savings associated with this consolidation amount to $ 26 thousand/ year.
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Mr. Paul Waddell, Director
Department of Revenue
Page 7
Clerical Support - Taxpayer Information & Assistance
Clerical assistance within the Taxpayer Information and AssIstance Section Is rendered through
a separate clerical unit headed by an Administrative Support Supervisor.
We recommend reassigning those clerical unit employees who handle casework typing and
document pulls to the case work units coordinating the research and generating the typewritten work. The
remaining Individuals who are Involved In receptionist duties should be assigned to either of the unit
supervisors or the section administrator.
This would result In the elimination of the Clerical Unit Supervisor for an annual savings of
$ 26.538. It would also establish quality control at the lowest possible level and a point closest to the
originating case research. All elements of the case, Including basic research, documents reviewed. action
taken, and correspondence developed will be under the control of the case work unit supervisor.
Reassign Quality Control Function to Une Units
WIthin the Taxpayer Information and AssIstance Section Is a two person quality control unit
reporting to the Section Manager. The quality control of the work of the section could be improved by
having this function performed by the sub unit where the work originates.
We recommend eliminating the quality control unit and realigning the quality control functions
currently administered by the Q. C. unit with the first level case worker supervisor, and as required to the two
Business and Income Unit managers.
elimination of the quality control unit wli result In annual savings of $ 49,752.
Armored Car Pickup Schedule
An opportunity exists to accelerate the deposit of revenue received each day by DOR In
connection with Income Tax retums. The Treasurer's OffIce has advised us that the availability of these
additional deposits would help improve cash flow at critical periods In the year.
SUMMARY OF SAYINGS
We recommend the State Treasurer's OffIce negotiate for a later ( 4: 30 pm) pickup by the
depositary bank. We have been advised that they can accept deposits up to 6: 00 pm.
Mr. Paul Waddell, Director
Department of Revenue
Page 8
exhibit 2, DOR Summary of Recommendation Titles and Savings, ouUlnes the Impact of each of
the recommendations and reflects savings resulting from revenue enhancement and general savings. The
magnitude of each Is as follO\ NS:
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$ 6,418.734
$ 6,186,000
369.049
$ 6,555,049
- 136.315
Revenue Enhancement
General SavIngs
Total
Less Annual Recurring Costs
Net Savings
No savings figures have been associated with this recommendation as the main benefit lies In
having additional deposits available to the State Treasurer each day. This Is partlculal1y Important during
the AprIl and May time periods when large expenditures for School AId become due.
At present, a eut. off time of 2: 00 pm has been established for Remittance PrOC888lng to submit
Its final transmittal of the day of receipts to the Comptroller's OffIce. This early eut- off Is required In order
for the Comptroller to have sufficient time to prepare the Cash Letter and accompanying deposit documents
for the depositary bank.
The Improved services and benefits ouUlned above are achieved through the 13 recommendations
discussed In this report The recommendations apply to several areas such as organizational restructuring,
process changes, revenue enhancement, management controls, funetionaJ realignment and staffing
requirements.
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Mr. Paul Waddell, Director
Department of Revenue
Page 9
OTHER ISSUES
Other miscellaneous areas of opportunity for Agency Improvements, not addressed because of the
limited duration of review, are as follows:
• CorPorate Tax - Further automation of this area appears warranted. We noted that there are
three generations of lap- top computers In use throughout the unit. A number of these are
unable to utilize the standard MicroSoft Version 5.5 Word Processing software. This unit needs
a policy manual as well as formalized training tor Its staff.
• Warehouse - Administrative Services Informed us that they are running out of storage space In
their present warehouse. We recommend that DaR enter Into discussions with AHCCCS
Management to explore using their warehouse. Most, If not all, of their current warehouse space
should become available within the next year. This warehouse Is much larger than DaR's; the
lease costs AHCCCS Is currently paying per square foot of storage Is SUbstantially less than
DaR's present costs.
• Phone System - The DaR telephone system Is limited but the situation on the 5th floor Is very
bad. The telephones ring excessively before a response and then the caller Is likely to be put
on hold. This generates poor public relations.
• Sales Tax - This appears to be an overly complex system; one which does not promote
compliance.
• Policyaralning Loop - There Is a need to establish In all audit areas, a formal method for
translating audit decisions ( Informal and formal) Into policy and training programs.
• Quality Control - The supervisors In the various audit areas should increase their activities as an
ongoing and Integral part of quality control activities.
• Informal Hearings and Protests - There are hearings and protest units or aetlvltles housed in
each of the audit sections. These are currently being revieWed by DaR for possible merging
Mr. Pau Waddell, Director
Department of Revenue
Page 10
Into a single unit. There are economies of scale as well as the possIbUlty of freeing auditors for
audit work.
• IndMdua! Audit - As noted In one of our earlier recommendations, the clerical situation needs
to be closely reviewed for reorganization. It could be decentralized to the audit units or
restructured to reftect a small centralized unit with some decentralization.
• Training - Efforts to combine training classes across agencies through the coordinating auspices
of the DOATraining Unit should be encouraged. Also, opportunities for pooling related services,
such as audio/ video production services and other Instructional media, as well as Instructors
themselves, should be further explored.
• Pybllcatlons - The Department of Commerce publishes a " Guide to Establishing a Small
Business" which includes a chapter entitled " Ucenslng Requirements for Selected Businesses
and Professions." Information in this chapter Is collected and published ( per statute) by the
Department of Revenue. The Information Is collected by DOR via surveys of various state
agencies to determine their licensing requirements. Since two state agencies are duplicating
the same published Information, and the " Guide" undoubtedly has the potential for wider
distribution, It may be appropriate to shift the legislative authority for publication to the
Department of Commerce.
• Job TltJes/ ResoonsibUlties - Disparity frequently exists between actual job responsibilities and
the duties as listed In the job/ grade specifications.
IMPLEMENTATION
Implementation Is the critical step In the process of achieving savings. Potential savings are often
identified but not achieved when the Implementation process Is distracted by day- to- day activities, and
managers shy away from the necessary reduction In staff. Successtullmplementations are marked by two
things: ( 1) a strong commitment from senior management to achieve as much of the savings as proves
possible; and ( 2) designation of implementation team leaders with the mental toughness to see the task
through to completion.
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Mr. Paul Waddell, Director
Department of Revenue
Page 11
The implementation process is best carried out soon after the review process. This maintains
momentum whRe the topics are fresh In people's minds. We estimate that most of the recommendations
contained in the report can be Implemented within a period of twelve months. Some recommendations.
hoINever, may require additional time as they are dependent upon leglslatlve approval.
Our recommended Implementation Plan in Exhibit 3, DOR Implementation SChedule, outlines an
Implementation sequence and approximate duration for each recommendation. A detaled plan wli be
established at the outset of the Implementation. Indlvklual recommendation and Implementation
requirements are included with the recommendations in the detaUect section of this report.
* * * * *
Mr. Pa~ Waddell, Director
Department of Revenue
Page 12
We wish to thank you and your entire staff for their complete cooperation and support of our
efforts during this study.
We appreciate the opportunity to be of service to the Governor and the SUM Steering
Committee In this endeavor. Should you have any questions regarding this report please feel free to contact
the Project executive or any member of your Project SUM Team:
• James GrIfflth, Department of Economic Security
• Carl Jager, Department of Transportation
• Phyllis Knox, Department of Health Services
• Thomas Donahue, Coopers & Lybrand
David St. John
Executive Director
Project SUM
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SLIM INTERVIEW LIST
DEPARTMENT OF REVENUE ( DOR)
.
Date: Apr 20 - lOam
Name Title Date Time Interviewer
Kickoff Meeting NA Mar. 5.92 10: 00am Team
Confid. Training NA Mar. 6.92 8: 00am Team
P. Waddell Director Mar. 9.92 10: 00am Team
R. Serino AD, Data Management Mar. 10,92 3: 00pm Team
R. Milanese AD, Taxpayer Support Mar. 11,92 8: 15am Team
J. McVey AD, Propty Valuation Mar. 11.92 1: 00pm Team
H. Scott AD. Oversight & Analysis Mar. 11,92 2: 30pm Team
k. Behringer Deputy Director Mar. 12.92 10: 00am Team
J. Timko AD. Administrative Services Mar. 12,92 1: 30pm Team
S. Shillrin AD, Tax Enforcement Mar. 12.92 3: 00pm Team
D. McCuin Corporate Income Tax Admin. Mar. 16,92 1: 00pm Griffith
A. Arant- Cousins Exec. Asst. Tax Enforcement Mar. 16.92 10: 00am Griffith
M. Metko Purchasing Manager Mar. 16.92 2: 30pm JagerlKnox
R. Cobbin Records Management Supervisor Mar. 16.92 8: 30am Jager/ Knox
G. Sailors Admin. Services Officer IV Mar. 16.92 10: 00am Jager/ Knox
L. Gantz EDP Programmer Analyst III Mar. 16.92 1: 30pm Jager/ Knox
J. Postal Trans. Privilege Tax Admin. Mar. 16,92 2: 30pm Griffith
J. Norris Collections Administrator Mar. 16.92 4: 00pm Griffith
R. Robinson Indiv. Income Tax Administrator Mar. 16.92 8: 30am Griffith
B. Pipkin Administrative Asst. III Mar. 17,92 10: 00am Jager/ Knox
P. Dunbar Training Administrator Mar. 17.92 1: 30pm Jager/ Knox
A. Moss Revenue Supervisor III Mar. 17,92 2: 30pm Griffith
J. Ward Administrative Support Supvr. Mar. 17,92 8: 30am Jager/ Knox
D. Barnes Information Center Mgr. Mar. 17.92 3: 00pm Donahue
K. Kichler Sys. & Programming Mgr. Mar. 17.92 1: 30pm Donahue
G. Shagena Computer Operations Mgr. Mar. 17,92 8: 30am Donahue
C. Anthony Rev. Field Auditor II Mar. 18.92 1: 30pm Griffith
L. Prins Administrator Mar. 18.92 3: 30pm Knox
M. Reyes Admin. Supervisor Mar. 18.92 1: 00pm Jager
E. Leyba Administrator Mar. 18.92 8: 30am Donahue
J. Russell Property Appraiser IV Mar. 18.92 1: 30pm Donahue
M. Finley Admin. Systems Supvr I Mar. 18.92 2: 00pm Jager
W. Nowiin Property Appraiser Mar. 18.92 3: 00pm Knox
D. Hesselgrave Examiner Tech I Mar. 18,92 3: 00pm Knox
M. Lewis Clerk Typist III Mar. 18.92 1: 00pm Knox
S. Franzman Admin. Svcs. Officer IV Mar. 18.92 3: 00pm Knox
B. Beion Manager Mar. 18.92 3: 00om Donahue
page 1
DCR · 13
EXHIBIT 1
PAGE 1 OF 4 PAGES
EXHIBIT 1 I PAGE 2 OF 4 PAGE
SLIM INTERVIEW LIST
DEPARTMENT OF REVENUE ( DOR)
Date: Apr 20 - 10am
Name Title Date Time Interviewer
C. Hudak Rev. Field Audiotr !" Mar. 18.92 10: 30am Griffith
V. Wright Rev. Field Auditor n Mar. 19.92 9: 30am Griffith
T. SChlosser Prog. & Proj. Spec. II Mar. 19.92 8: 30am Griffith
M. Bacon Fiscal Services Spec. II Mar. 19.92 1: 30pm Knox
G. Nichols Faciliities Supervisor Mar. 19,92 9: 30am Jager
M. Finley Admin. Systems Supvr I Mar. 19,92 3: 00pm Jager
T. McGinnis Rev. Field Auditor II Mar. 19,92 10: 30am Griffith
L Stakes Fiscal Services Sys. Analyst Mar. 19.92 4: 00pm Knox
L Montgomery Fiscal Services Spec. II Mar. 19.92 9: 00am Knox
Y. Hopkins Clerk Typist Mar. 1S, S2 : 9: 30am Jager
S. Noyes Fiscal Services Spec. II Mar. 1S. 92 10: 30am Knox
W. Kusnerz Systems Engineering Mgr. Mar. 19,92 8: 30am Donahue
I. Hardin Fiscal Services Spec. IV Mar. 1S, S2 2: 30pm Knox
S. Flores Forms Analyst III Mar. 20,92 2: 00pm Knox
T. Stitt Buyers Assistant Mar. 20,92 3: 00pm Knox
L Gasper Admin. Assistant III Mar. 20,92 S: OOam Knox
J. Secket Clerk Typist Mar. 20,92 9: 45am Jager
J. Peters Collection Suovr I Mar. 20.92 10: 00am Griffith
T. Simmons Collection Supvr II Mar. 20, S2 3: 00pm Griffith
S. Shiffrin Assistant Director Mar. 20, S2 1: 00pm Griffith
L. Byrd Warehouse Worker Mar. 20. S2 9: 00am Jager
F. Caruso Collection Supvr. II Mar. 20.92 8: 30am Griffith
N. Buta Collection Supvr I Mar. 20.92 1: 30pm Griffith
C. Dicken ! EDP Sys Proj Mgr I Mar. 23.92 11: 00am Donahue
B. Marte Collector II Mar. 23.92 10: 00am Griffith
F. Medina Collection Supvr II Mar. 23,92 3: 00pm Griffith
K Riley Admin. Asst. II Mar. 23.92 8: 30am Griffith
V. Moore Collection Supvr II Mar. 23.92 1: 30pm Griffith
A. Cerelia EDP Sys Proj Mgr I Mar. 23.92 10: 00am Donahue
G. O'Neal Management Analyst III Mar. 24,92 3: 00pm Knox
E. Pullian Rev. Field Auditor II Mar. 24,92 1: 30pm Griffith
K Vere Admin. Supp. SVC5 I Mar. 24.92 11: 00am Donahue
J. Timko Assistant Director Mar. 24,92 1: 00pm Donahue
R. Valles Admin. Services Officer II Mar. 24,92 10: 30am Donahue
N. Miller Admin. Services Officer I Mar. 24.92 10: 00am Donahue
V. SonSui Admin. Supp. Svcs I Mar. 24.92 10: 00am Donahue
G. Sailors Comptroller Mar. 24.92 11: 30am Knox
P. Waddell Director Mar. 24,92 3: 30pm Donahue
R. Petrenka Deputy Treasurer Mar. 24.92 2: 00pm Donahue
B. Ward Administrator Mar. 24,92 8: 30am Knox
page 2
DOR - 14
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EXHIBIT 1
PAGE 3 OF 4 PAGES
SLIM INTERVIEW LIST
DEPARTMENT OF REVENUE ( DOR)
Date: Apr 20 - 10am
Name Title Date Time Interviewer
D. Brewer Admin. Supp. Svcs I Mar. 24.92 9: 00am Donahue
K Abramsohn Chief Hearing Officer Mar. 24.92 10: 00am Knox
N. Green Admin. Services Officer I Mar. 24,92 11: 00am Donahue
K Vere Admin. Supp. Svcs I Mar. 24.92 11: 00am Donahue
G. Meyers Administrator Mar. 24.92 1: 30pm Knox
M. Stacey Rev. Field Auditor Sup. I Mar. 24,92 3: 00pm Griffith
D. Fredenburg Admin. Svcs. Officer IV Mar. 25,92 1: 30pm Knox
K Abramsohn Chief Hearing Officer Mar. 25,92 8: 30am Knox
S. Silver Rev. Field Auditor III Mar. 25,92 3: 00pm Griffith
D. Plaughman Rev. Field Auditor II Mar. 25.92 1: 30pm Griffith
V. Penez Rev. Field Auditor II Mar. 25.92 10: 00am Griffith
R. Petrenka Deputy State Treasurer Mar. 25,92 2: 00pm Donahue
R. Gaddis Rev. Field Auditor II Mar. 25,92 8: 30am Griffith
E. Snow Management Analyst III Mar. 25,92 3: 00pm Knox
D. Fredenburg Administrative Svcs Officer Mar. 25,92 1: 30pm Knox
D. Walth Administrator Mar. 25.92 10: 00am Knox
D. Alcorn Rev. Field Auditor III Mar. 26.92 1: 30pm Griffith
A. Garcia Rev. Field Auditor Sup III Mar. 26,92 10: 00am Griffith
J. Wallen Management Analyst III Mar. 26,92 8: 30am Knox
K McQuiity Rev. Auditor III Mar. 26,92 8: 30am Griffith
M. Polashek Rev. Field Auditor II Mar. 26.92 3: 00pm Griffith
W. Molina Clerk Typist 111 Mar. 27,92 10: 00am Griffith
B. Brion Field Collector II Mar. 27,92 1: 30pm Griffith
B. Rivera Exam Technician II Mar. 27,92 8: 30am Griffith
D. Muccilli Compliance Manager Mar. 30,92 9: 00am Jager
K Latella Supervisor Mar. 31.92 11: 30am Jager
P. Waddell Director Mar. 31.92 3: 30pm Team
C. Olson Supervisor Mar. 31.92 10: 30am Jager
A. Severance Property Appraiser IV Mar. 31.92 1: 30 Knox
J. Timko Assistant Director Mar. 31.92 9: 00am Team
C. Murray- Leyba Admin. Svcs. Officer IV Mar. 31.92 10: 30am Knox
B. Belon Manager Apr. 1.92 10: 30am Donahue
J. Russell Property Appraiser IV Apr. 1.92 8: 30am Donahue
G. Sailors Comptroller Apr. 1,92 3: 00pm Donahue
W. Nowlin Property Appraiser/ Fin. Analyst Apr. 1.92 1: 30pm Donahue
V. Weiss Clerk Typist III Apr. 2.92 2: 00pm Jager
L. Kishbaugh Supervisor Apr. 2.92 3: 00pm Jager
W. Eichelberger Supervisor Apr. 2.92 9: 00am Jager
E. Leyba Administrator Apr. 2.92 10: 30am Donahue
D. Wickersham , Manaoer Aor. 2.92 10: 30am Jager
page 3
OOR - 15
EXHIBIT 1
PAGE 4 OF 4 PAGES
SLIM INTERVIEW LIST
DEPARTMENT OF REVENUE ( DOR)
Date: Apr 20 - 10am
Name Title Date Time Interviewer
L Prins Administrator Apr. 2.92 8: 30am Donahue
S. Franzman Admin. Svcs. Officer IV Apr. 3.92 8: 30am Donahue
R. Gustafson Admin. SIICS. Officer IV Apr. 3.92 1: 30pm Knox
R. Jackson Property Appraiser IV Apr. 3.92 10: 30am Knox
S. Barney Property Appraiser IV Apr. 3.92 3: 30pm Knox
D. McCuin Administrator Apr. 3.92 8: 30am Griffith
T. MacConnell Fiscal Svcs. Unit Supervisor Apr. 6,92 9: 00am Knox
G. Shagena EDP Camp. Opns. Mgr II Apr. i, 92 9: 00am Donahue
J. Norris Administrator Apr. 7,92 11: 00am Griffith
R. Serino Assistant Director Apr. 7,92 9: 00am Donahue
K Abramsohn Chief Hearing Officer Apr. 7.92 1: 30pm Knox
S. Shiffrin Assistant Director Apr. 10,92 9: 00am Griffith
R. Milanese Assistant Director Apr. 14,92 3: 00pm Donahue/ Jager
P. Waddell Director Apr. 1S. 92 3: 00pm Donahue
J. Timko Assistant Director Apr. 1S, 92 9: 00am Donahue! Jager
page 4
DOR - 16
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DEPARTMENT OF REVENUE
SUMMARY OF RECOMMENDATION TITLES AND SAVINGS Total Budget: $ 49,467,000 Total FTE Positions: 1277.8
EXHIBIT 2
June II, 1992
~,
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ANNUAL RECURRING BENEFITS FTE System Law Estimated Recurring One- Time
Net General Revenue Changes Changes Months to Costs To Costs To
Recommendation Titles Benefits Savings Enhance. REDUCTIONS ADDITIONS Requi red Required Complete Implement Implement
,. Comptroller's Office- Financial Svcs Staffing $ 30.600 $ 30,600 1 6 months
2. Micrographics- Income/ Corporate Fi les $ 26,538 $ 26,538 1 6 months
3. Additional Attorney Position $ 1,925,000 $ 1,980,000 1 6 months $ 55,000
4. Armored Car Pickup Schedule $ 0 completed
5. Clerical Support- Taxpayer Info. & Assistance $ 26,538 $ 26,538 1 6 months
6. Reassign OIC Furction to Line Units $ 49,752 $ 49,752 2 6 months
7. Sales Tax License Enforcement $ 280,480 $ 360,000 3 12 months $ 79.520 $ 25,500
8. Corporate Audit Restructure $ 1,958,865 $ 8,865 $ 1,950,000 2 12 months $ 25,000
yes
9. Withholding Tax Transfer $ 770,000 $ 770,000 see note 1 18 months
10. OIC Functions- AD's Office $ 420,000 $ 420,000 3 months
11. Individual Income Tax Audit $ 710,711 $ 4,711 $ 706.000 1 6 months $ 25,000
Note 2
12. Opportunity Cost of Manual Legal Research $ 45,740 $ 47,535 1 3 months $ 1,795 $ 600
13. Divis on Consol idation $ 174,510 $ 174,510 4 3 months
TOTALS: $ 6,418,734 $ 369,049 $ 6,186,000 11 6 $ 136,315 $ 76,100
NET FTE SAVINGS: 5
Notes: 1. Leglsl~ tion required to move Withholding function to Department of Economic Security.
2. Cost a~ oidance through el imination of one vacant position.
DEPARTMENT OF REVENUE IMPLEMENTATION SCHEDULE
( PRELIMINARY) EXHIBIT 3
I MONTHS
TITLE I 1 I 2 I 3 I ~ I 5 I 6 I 7 I 8 I 9 I 10 111 I 12 I 13 I 14 I 15 I 16 I 17 118 I 19 I 20 I I
I I I I I I. COMPTROLLER'S OFFICE - FINANCIAL SERVICES STAFFING I
I I I I I 2. MICROGRAPHICS - INCOMEICORPORATE FILES I
I I I I I 3. ADDITIONAL ATTORNEY POSITION I
4. ARMORED CAR PICKUP SCHEDULE - I 1 I I I 5. CLERICAL SUPPORT - TAXPAYER INFORMATION & ASSISTANCE I
I I I I I 6. REASSIGN Q/ C FUNCTION TO LINE UNITS I
I I I I I 7. SALES TAX LICENSE ENFORCEMENT I
I I I I I I I I I I I a. CORPORATE AUDIT RESTRUCTURE I
I I I I I I I I I I I
9. WITHHOLDING TAX TRANSFER I
I I II I I 1•. Q/ C FUNCTIONS - AD'S OFFICE
I I II. INDIVIDUAL INCOME TAX AUDIT I
I I 12. OPPORTUNITY COST OF MANUAL LEGAL RESEARCH I I I 13. DIVISION CONSOLIDATION •
DORIMP
8 : D ... ClI: l
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CQUPTROII fA'S OFFICE - ANANCIAL SERVICES STAFFING
The Comptroller's office Is located within the DtvIsIon of Administrative ServIces. Key strategic
business functions are divided among four office units. These office units Include Financial Control,
Support/ Payroll, Special Tax, and Financial ServIces.
Financial Serylces Unit
The Financial Services Unit Is the core of financial accounting functions. The unit Is responsible for
handling DOR accounting functions including the reconcUlatlon of all DOR revenue; arranging and
processing DOR travel claims; and Interfacing with commercial banks on deposits, returned warrants and
foreign checks. Financial Service Unit personnel are currently divided into reconcHlatlon or expenditure
related functions and activities.
The spans of supervisory control In the Financial Services Unit Is narrow, and Is comprised of 12
FTE positions with the following supervisor/ employee ratios:
• A 1: 3 sypervisorlemoloyee ratio exists in the feconcUlatlon area. The Fiscal Service
Specialist III supervises all reconcUlatlon functions and activities, completes the Fund
Status Summary Report, processes Purchasing charge- backs for non- paper supplies
and develops operating procedures. The FIscal Service Specialist III directly supervises
two Fiscal Service Specialist II positions which are responsible for reconcUlng sales tax
revenues and the expenditure ledger of the ArIzona Financial Information System ( AFIS)
and handling revolving funds and bank statements; and one Account Technician II
position which Is responsible for handling reconcHlatlon of non- sales tax revenue such
as special, Income/ corporate and withholding taxes
DOR - 19
• A 1: 4 supervisor/ emPloyee ratio exists In the 8XP8Oditure area. The Fiscal Services Specialist
II supervises expenditure related functions and activities which Includes processing accounts
payable claims. completing the expenditure areas of the Fund Status Summary Report. handling
expenditures for all DOR Divisions and developing operating procedures. The Fiscal Service
Specialist II position directly supervises one Account Technician III position which Is responsible
for handling travel and accounts payable claims; and three Account Technician II positions
which are responsible for reconcIlng generaJ fixed assets and processing paperwork for the
Division
• A 1: 2 supervisor/ emDlovee ratio exists In the FloancJa! Services Unit. The Fiscal Service Unit
Supervisor manages and supervises the Financial Services Unit and Interfaces with all
Comptroller personnel. The Fiscal Service Unit Supervisor directly supervises one Account
Technician II position which Is responsible for handling foreign checks and returned warrants.
and coordinates bank deposits; and one Account Technician III position which Is responsible
for coordinating sUrplus property procedures and the Inventory of all DOR assets which are
reconcUed with accounting data
e A 1: 2 SUOOI"'.. n. sorIsuD8l"' lisor ratio sx! sts In the Flnanc! a! Ser..' ice Unit. In addition to the two
positions In the preceding paragraph. the Fiscal Service Unit Supervisor directly supervises two
supervisors. one Fiscal Service Specialist III and one Fiscal Service Specialist II ( see Exhibit 4,
Comptroller's OffIce ( FInancial Services Unit), Present Organizational Structure).
The organizational structure In the Financial Services Unit results In an Inefficient use of supervisory
personnel and unnecessary duplication. This duplication Is manifested In two supervisory levels detailed In
the previous section. Each of the designated supervisory personnel are spending more than 50% of their
time performing tasks other than supervision. There are three working supervisors within the Financial
Services Unit. Supervisory tasks could be consolidated and the supervisory ratio expanded with limited
Impact as Financial Services Unit personnel are cross- trained.
We recommend revising the organizational structure of the Financial Services Unit In the
Comptroller's OffIce and eliminating one of the two supervising Fiscal Services Specialists. The remaining
DOR - 20
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Fiscal Services Specialist will supervise both revenue and expenditure functions within the Financial Services
Unit ( see Exhibit 5, Comptroller's OffIce, Proposed Organizational Structure ( FInancial services Unit).
• Financial ServIces Unit personnel are cross- traIned and can be supervised by one
supervisor.
• Con8oIldation of revenue and expenditures functions wli eliminate the need for two
supervisors reporting to the FIscal Services Unit Supervtsor. The elimination of one
Fiscal Services Specialist II wli reduce $ 30,600 In salary and ERE costs per year.
• Total Savings = $ 30,600
• Address Personnel reductions through reassignment. Coordination and approval with
Personnel DMslon
• Develop new organizational charts
• Resolve space Issues, and location
• Communicate changes within the DOR.
DOR - 21
PRESENT
COMPTROLLER'S OFFICE
1992 ORGANIZATIONAL STRUCTURE
EXHIBIT 4
8 : D
~
COMI'TIlOLLEIl
OlIADE 23
I I I
FINANCIAL SUI'I'OIlT/ I'AYIlOLL SI'ECIAL TAX FINANCIAL
CONTROL ACCOUNTING SEIlVICES
FS SVC SYSTEN AOMIN. ASST. III
ANALYST FS SVC SI'EC IV FS UNIT SUI'V
OItADE 21 ORAD! 17 ORAD! 18 OIIADE 19
I I I
FS SPEC. II I I EXA/ ilINEIl TECH. II I I I
OItADE 16 ORAD! 13
INFO. P! lOC. SPEC. AOMIN. ASST. II FISCAL SEIIVICE FISCAL SEIIVICE ACCT. TECH. III ACCT. TECH. II
II SPECIALIST III SPECIALIST II
OIIADE II OIIADE IS OlIADE 17 0ItA0E 16 ORAD! 13 MADE II
I I ACCT. TECH. III I I
OlIADE 13
CLEIlK TYI'IST III AOMIN. ASST. I FISCAL SEIIVICE ACCT. TECH. III
SI'ECIALIST II
0ItA0E II OIIADE 13 OItADE 16 OlIADE 13
I I EXA/ ilINEII TECH. I I I
GftADE 12
CLEIIK TVPIST II ACCT. TECH. II FISCAL SEIlVICE ACCT. TECH. II
SPECIALIST II
OlIADE 9 OlIADE 11 GRADE 16 0ItA0E II
INFO. P! lOC. SI'EC. I I II
GftADE 11
ACCT. TECH II ACCT. TECH. II
GRADE 11 GRADE II
ACCT. TECH. II I
OItADE 11
ACCT. TECH. II
GRADE 11
ACCT. TECH. II
GftADE 11
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DEPARTUENT OF REVENUE
ADMINISTRATIVE SERVICES DIVISION
OFFICE OF THE COMPTROLLER
PROPOSED ORGANIZATIONAL STRUCTURE
EXHIBIT 5
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lXJI'TAOlLBV MlIlINISTlIATIVE
_ INISTlIATlIl f-- SECIlETMf'I
I I I
SlJ'I'CRTtPAVROLL SPECIAL TAX ESTATE TAX I' 1SCAL S! IlVICI! S I'IIWlCIAL SVCS
ADIlIN ASST. III I' 1S SVCS SPEC IV =.. rmr SVS11! IlS AllALVST m SVCS IIIIT
SlftIlVISlJI
I _ IN ASST. II EX. IIUIER EXAIl I' 1S SVCS ACCQ. IITING
I' 1SCAL S! IlVICI! S
TECH II TECH I SPEC. III I-- - TECH III
SPECIALIST II
_ IN ASST I ACCQ. IITIN3 EXAIl FIS SVCS ACCQ. IITING
. TECH III TECH I SPEC. II I-- - TECH II
INFO. PRlC. EXAIlllER CLERK FIS SVCS. ACCQ. IITIN3
SPECIALIST II TECH I TYPIST III SPEC. II I-- - TECH II
ACCXUiTIN3 INFO PRlC. CLERK ACCQ. IITIN3 ACCQ. IITIN3
TECH II SPECIALIST II TYPIST III TECH III f-- - TECH II
CLERK ACCXUiTIN3 CLERK ACCIJJfTIN3
TYPIST II TECH II TYPIST III - TECH II
CLERK ACCXUiTIN3 CLERK ACCXUiTIN3
TYPIST III TECH II TYPIST III '-- TECH II
DOR - 23
V4e92-
MQQGRAPHICS - INCOME/ CORPORATE ALES
TheRecords ManagementSectIon within the Administrative Services DMsIon Includesthree sections:
Micrographics, Income and Corporate Fles, and Warehouse operations. Two of the three sections have
closely aligned functions. Both are small and each has Its own supervisor. In addition, one unit has
employees serving as ' eads.- In this connection, an opportunity exists to combine the operations of both
Into one unit.
The Micrographics Unit is staffed by a supervisor and two leads plus five permanent line workers.
The lead clerks are classified higher than the line employees, but lower than the unit supervisor. One lead
supervises part time, the other lead position functions most often as a line employee. Temporary employees
( from one to fifteen) are added during heavy tax times, chiefly during Individual Income tax return season.
The unit's work consists of unstapllng, straightening and otherwise preparing all documents for microfilming,
operating several microfilming machines to microfilm all documents, and rebatchlng and restapllng material
for the Income and Corporate FUes Section.
The Income/ Corporate FUes section has a supervisor and two clerk typists. The section handles
copy orders of the source film ( seven copies are made by private vendor); distributes film copies throughout
the Agency; picks up and shreds small volumes of sensitive documents ( large batches are handled by
outside contractor); and serves as liaison for both the DOA Records Management Center and the Agency's
warehouse for sending and retrieving needed work documents.
Both the Micrographics and Income/ Corporate FUes supervisor Incumbents are cross- trained to fill
In for each other when required.
The micrographics supervisor's work consiGts chiefly of caring for the actual ( exposed and
unexposed) film Including splicing, refilming If required, and distribution. However, line employees are
trained and have their work scheduled by the two leads In the unit.
DOR - 24
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Much of the FUes Supervisor time Is spent In disseminating filing Information to agency personnel
( holdIng meetings), filling In for the two line employees ( shredding and document boxing work) and
coordinating activity with the Archives Records Management Center. This supervisor also Dis In for the
micrographics supervisor on occasion. A minimal percentage of time appears to be spent In actual
supervision.
In effect, there are four positions contributing to the 8Upervtslon of seven full- time and two part- tIme
line employees. The two sections' respective duties are necessarUy closely coordinated. Even though staff
requirements seasonally expand and contract, not all positions are needed for supervisory duties.
We recommend eliminating one of the two Administrative Support Supervisors and merging the two
sections of Micrographics and Income/ Corporate FMes. The proposed structure, togetherwlth other section
organlzatlonaJ changes Is highlighted In exhibit 6, Procurement and FacUlties/ Records Section, Proposed
Organizational Structure ( Administrative Services DMslon).
The resulting unit would have seven line employees, of which two would be leads assisting In work
scheduling and monitoring, and one supervisor.
The excess supervisory duties represented by the four positions now Involved In supervision wBl be
eliminated. Closer coordination and sequencing of operations between the two operations can be realized
by having a one unlt- one supervisor structure. Cost savings Include one Administrative Support Supervisor
I ( grade 14) at $ 26,538 ( Includes ERE).
• Communicate plan for unit consolidation to Records Management employees
• Eliminate position In ac- eordance with Personnel DIVISIon nJles.
DOR - 25
ADMINISTRATIVE SERVICES DIVISION
PROCUREMENT AND FACILITIES/ RECORDS SECTION
PROPOSED ORGANIZATIONAL STRUCTURE
EXHIBIT 6
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PIIDC SPEC II
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IlUVER I
I-IHICIIOIlRAPHICS
I I - I FILES ooT
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AllMIHISTRATIVE AllMINISTRATIVE ClEll(
SU'ERVIsal I SU'ERVIsal I
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TVPIST II
( LEAl » MIClI: FILM c=_ IJ 0
TECH II
( LEAD) -. t; LfRK
MIClI: FILM _ I ~ TVPIST 1
TI: CH II
MIClI: FILM _. ClEll(
TECH 1 _ I TVPIST 1
MIClI: FILM ClERICAL
TECH 1 ASST.
HIClI: FILM ClERICAL
Tt'CH I I- ASST.
MIClI: FILM CLERICAL
I- TECH I ASST.
MIClI: FILM ClERICAL
I- TECH I ASST.
CLflI( ClERICAL
TVPIST I ASST.
CLERK CLERICAL
~ TVPIST I ASST.
DOR - 26
FACILITIES
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AIlIlIHISTRATIVE
ASST III
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AllMIHISTRATIVE
ASST III
-
r~ l
RIllS ANALVST
III 1--'-
IlU'IER
ASSIST
V489J- 5
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ADDITIONAL AUQRNEY POSIDON
The Department of Revenue's IntemaJ Audit/ CrImInal Investigations unit funds one Attorney position
In the ArIzona Attorney General's ( AGo's) OffIce through an Intergovernmental Agreement. The Attorney
dedicates 100% of time avalable to the pursuit of criminal indictments by the Grand Jury and the
prosecution of criminal tax cases. The IntemaJ Audit/ Criminal Investigations Unit currently has 54 active
cases. The prosecutor In the AGo's OffIce receives tax cases referred by the Internal Audit/ Criminal
Investigation's Financial Investigations Auditors. The Internal Audit/ Criminal Investigations Unit averages
15 referrals per year. The prosecutor averages 12 criminal Indictments per year.
A backlog of seven active tax cases exists at the AG.' s Office with an estimated tax IlabHIty of $ 1.4
MUlion. Four active cases wli be added to the backlog within the next four months. In addition, nine of the
54 active tax cases at DOR awaiting referrals have a total estimated tax llabllty of $ 1.98 MUlion. The
remaining 45 tax cases at DOR are on hold because the degree of tax violation Is unknown or the
Investigation wli result In cM! action rather than criminal prosecution.
• One Prosecutor in the AGo's Office Is Insufficient to handle the volume of criminal
tax cases generated by the Intemal Audit/ Criminal Investigations Unit
• There Is a backlog of active tax cases awaiting prosecution
• Some active tax cases which are open have been awaiting prosecution by the AGo's
OffIce for years, which resUts In Flnanclallnvestlgatlon Auditors spending additional
time updating tax case records.
RecqrrmII....
We recommend the addition of one Attorney at the AG.' s OffIce to handle the volume of criminal
tax cases requiring prosecution.
DOR - 27
Bel"
• The proposed addition of ( 1) Attorney to the A. G.' s OffIce wli resUt In revenue
enhancement by Increasing the number of active tax cases prosecuted annually.
One attorney ( Assistant A. G.) =$ 55.000 Including ERE
The expenditure of $ 55.000 wli yield a ootentIaI collection of $ 1.98 MUllon ( nine tax cases at OOR)
In estimated tax lIabilty plus $ 1.4 Millon ( seven tax cases at the A. G.' s OffIce) In estimated tax IIabUIty
• An additional Attorney wli enable the A. G. · s OffIce to adequately handle the volume
of active tax cases referred for prosecution by the Intemal Audit/ Criminal
Investigations Unit
• Voluntary compliance Increases when criminal prosecutions and convictions are
printed In the f18\ YSP8P8r
• Reduces the number of backlogged active tax cases
• Increase the number of active tax cases referred to the prosecutor In the A. G.' s
Office
• Reduced necessity for updating tax case records awaiting prosecution
• Total estimated revenue enhancement approximates $ 1,980,000 with a potential total
estimated revenue enhancement of $ 3,380,000 ( includes convictions on all seven tax
cases currently In the A. G.' s OffIce with a potential total estimated revenue of
$ 1,400,000).
• Communicate with the A. G.' s OffIce regarding Intentions to fund an additional
Attorney for prosecution of criminal tax cases
• Increase budget request to cover the funding of the additional position
OOR - 28
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• Obtain Position Description Questionnaire ( pDQ) from Attorney General's OffIce and
coordinate the establishment of one additional Attorney position at the A. Go's OffIce
• Coordinate recruitment and special selection preference through State Personnel
Division for Interviewing and selection by the Attorney General's OffIce
• Coordinate the additionai Attorney's responsIbiltles and duties with the other
Prosecutor funded by DOR In the A. Go's OffIce.
DOR - 29
ARMORED CAR PlQQJP S01EDUI.. E
At present, a eut- off time d 2: 00 pm has been established for Remittance Processing to submit Its
last transmittal d cash/ checks to the Comptroller's OffIce. ThIs early eut- off Is required to provide the
Comptroller sufficient time to prepare the Cash Latter and accompanying deposit documents for Security
Pacific - the depository bank. Security Pacific Bank presently schechJes Its final armored car pick- up of
the day for 3: 30 pm.
In this connection, an opportunity exists to accelerate the bank deposit of payments received each
day by DOR of Income Tax returns.
The Comptroller has stated that the bank does not actually require receipt of the final deposit untO
6: 00 pm of each day and that, If the final pickup of cash/ checks could be delayed another hour, the
Comptroller's OffIce - working with Remittance Processing - could significantly Increase the daHy deposit
amount.
Recommertia'blS
We recommend the State Treasurer's Office negotiate for a 4: 30 pm pickup by Security Pacific Bank.
Discussion with this Office Indicates the bank Is wiling to comply.
After being Informed of the new pick- up schedule by the State Treasurer, the Comptroller's Office
should arrange with Remittance Processing for a later dany cut- off.
The avaUabUIty of these extra deposits will assist In Improving " cash fiow." As an example, twice
yearly, a cash " crunch" Is experienced when the AprU and May expenditures for State AId to Schools
DOR - 30
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become due. For eight months of the year. the Treasurer Is liable tor $ 100 mUllan plus payments to the
schools. However. In AprU and May, the payment amounts are doubled. res~ ng In $ 200 mUllan plus
expenditures on the 15th day of each month. To meet these obligations, the Treasurer's OffIce may at times
be required to Issue Treasurer's Warrant Notes. The Treasurer's OffIce has calcuated the Interest due on
such a short- tenn loan would be paid at approximately the same rate as short tenn tax anticipation. or
revenue anticipation notes.
No savings are projected. The main benefit Is the Improved cash flow tor the Treasurer's Office and
the prevention of short- term borrowing.
Implementation activities:
• Renegotiation of armored car pickup schedule with Security Pacific Bank by the Treasurer's
office.
• Change to a later cut- off time for final cash/ checks delivery by Remittance Processing to the
Comptroller's office.
DOR - 31
a. ERICAL SUPPORT - TAXPAYER INFORMA1JON & ASSISTANCE
Clerical assistance within the Taxpayer Infonnation and Assistance SectIon Is rendered through
a separate clerical unit headed by an Administrative Support Supervisor. This does not allow for the revleYI
of the clerical pool within the same unit where the work originates. Quality Control of work can be
strengthened by distributing the clerical employees to the work unit.
The Phoenix location of the Information and AssIstance section Is organized Into two units ­Business
Tax and Income Tax. A separate support unit Is composed of seven clerk typist positions and a
supervtsor. Each unit has telephone unit personnel for answering questions. and case workers for handling
research on the more difficult taxpayer issues.
Two levels of clerk typist are In the support unit. The three clerk typists I positions handle primarily
document pulls and microfilm copies needed for case workers' research. These employees also serve as
receptionist/ telephone switchboard operators for the Department. The clerk typist II positions handle the
typist load for the case work units.
The current work flow process Is shown In Exhibit 7, Caseworker Clerical Support, Present Work
Row Process. Handwritten work to be typed ( usually correspondence) Is generated by the case workers
In both the Business Tax and Income Tax units. Work to be typed Is assigned by the clerical supervisor.
Most work Is proofread by the clerical supervisor. given to the quality control unit for another quality check
along with the completed case file. The quality control unit sends taxpayer record adjustments to the
Comptroller's Office, If required, and then mans out correspondence.
The quality control for typewritten work does not rest with the originating caseworker or
C8S8Vi0rker supervisor. but Is located Instead In the separate clerical unit. Only under exceptional cases
( e. g., a requirement for some clarification) would the typist material return to the originating unit.
Documents and mlcrofHm pulls needed to complete casework research are also conducted within
the separate clerical unit. after the originating assignment has surfaced from the case worker.
DOR - 32
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We recommend reassigning those clerical unit employees who handle casework typing and
document pulls to casework units coordinating the research and generating the typewritten work, and
eliminating the clerical unit supervisor. The Individuals who are Involved In receptionist duties should be
assigned to either of the unit supervisors or the section administrator.
Typing and other clerical work & hOOd be reviewed by the originator and unit supervisor along with
the rest of the elements of the case. The caseworker supervisor wli provide supervision for the entire unit,
eliminating the need for the clerical unit supervisor. The proposed process Is shown In Exhibit 8, Casework
Clerical Support, Proposed Work Flow Process.
We also recommend Investigating the feaslbUIty of having case workers perform typing functions
through automated systems, thus reducing the need for clerical staff.
Assigning the clerical support staff to the units which originate the need for this support wli
establish quality control at the lowest possible level and at a point closest to the originating case research.
All elements of the case, including basic research, documents revl9Vt'ed, action taken, and correspondence
developed wli be under the control of the case work unit supervisor.
Cost savings Include: elimination of the clerical unit supervisor - Administrative Support Supervisor
( grade 14, salary plus ERE) = $ 26,538
• Communicate reassignment plans to Taxpayer Information & AssIstance staff, Including
changes In work process.
• Implement plan In accordance with State personnel rules.
DOR - 33
CASEWORKER CLERICAL SUPPORT
PRESENT WORK FLOW PROCESS
EXHIBIT 7
CLERICAL UNIT WORKER QUALITY CONTROL UNIT
QUESTJON
IlEEDIIIII
ItESEAltCH
OOClAlENT
I'ULLS/ IlICRO
FILII ItESEAltCH
DOA - 34
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W4403- 6 I
I
CASE FILE
QUALITY
CHECK
NAIL- OUTI
TAXI'AYER
ADJUSTNENT
TYI'E j
CORRESI'DNDENCE
t--- t----~~----+--+ t
1
CORItESI'OlIDENCJ
QUALITY
CHECK
CONDUCTI
COIlI'LET£
ItESEAIICH
GENERATE J REVIEW
HANDWRITTEN c;:: J'--+--:__ F_ IL_ E_......
FORWARD
FILE
CASEWORKER CLERICAL SUPPORT
EXHIBIT 8
UNIT IWlAOER QUALITY CONTROL UNIT
DOCUMENT
PULL/ NICRO
fILM RESEARCH
PROPOSED WORK FLOW PROCESS
( ASSUMES ELIMINATION OF SEPARATE QUALITY CONTROL UNIT)
QUESTION
NEEDING
RESEARCH
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CONDUCT/
COMPLETE
RESEARCH
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CHECK, CORR./
COMPLETE FILEtt----- i--------------'
CASE fILE
L---+--+------ i_----+--+ lOUALITY CHECK ...--+---..
NAIL OUT!
TAXPAYER fILE
ADJUSTNENT v
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I OCR - 35
' 4404- 6
REASSIGN QUAlJJY CONTROL RJNCDON TO UNE lNIS
WIthin the Taxpayer Information Unit Assistance Section Is a two person Quality Control ( Q. C.) unit
reporting to the SectIon Manager. The quality control review of the work performed In the section C() ljd be
Improved by having this function conducted by the sub unit where the work originates. If necessary, the
unit supervisor Is also In a position to further ensure quality as required.
The work process Is shcMn In exhibit 9, Caseworker Quality Control, Present Process. Work In the
section flows from the origin of a case file Into either the business tax or Income tax unit. A file Is opened,
and research begun, for those taxpayers having questions which require research before an answer can be
forwarded.
Case workers assigned research topics utBlze the clerical employee to pull hard copy documents
or microfiche to determine taxpayer file or account status. When research Is complete, the case file and
any handwritten correspondence tor the taxpayer Is forwarded to the clerical unit. The clerical unit types
necessary material and forwards the file with typed correspondence to the Quality Control Unit.
The Quality Control Unit Is composed of a taxpayer services employee and a supervisor. The
majority of the quality control work Is accomplished by the taxpayer services employee. The supervisor
assists in the work and supervises the single employee.
Once the case file is reviewed and determined to be In order, adjustments to taxpayer records are
ordered and correspondence, If Involved, Is maled out. Changes to taxpayer records ( e. g., accounts
receivable - the majority of Issues needing research by the section) are not made by this unit. The reqUired
changes are logged and sent to the accounts receivable section ( Administrative Services OMslon) to be
adjusted by that section's employees.
Several days after the changes have been requested by the Quality Control Unit, one of the two
employees contacts the Accounts Receivable Section to determine If changes have Indeed been
Incorporated. If not, the unit follows up to determine the cause tor the delay.
OOR - 36
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Quality Control of the cases researched does not rest with the originating sub unit Invotved In
working each case. At. the unit manager level, no evidence was found that any quality control actions take
place. Instead, the section relies on a separate unit to administer the quality control function.
Recomn · · WP-We
recommend eliminating the quality control unit and realigning the quality control functions, now
administered by the Q~ C. unit, with the first level case worker supervisor and, as required, the two Business
and Income Unit Managers. The revised process is shown In exhibit 10, caseworker Quality Control,
Proposed Process.
The section has sufficient management/ supervisor levels In place ( Section Administrator, Unit
Manager, and case worker supervisor) to accommodate both quality assurance and quality control functions.
Assigning quality control functions to the supervision of those units which originate the case work
establishes those control functions at the lowest possible level and at a point closest to where the research
is actually accomplished.
WIth the Introduction of clerical support Into the work unit ( see Recommendation entitled - Clerical
Support- Taxpayer Infonnatlon & AssIstancej all elements of research can be quality checked by the existing
supervisory chain Instead of a separate employee unit. In effect, quality control Is established at the level
of work accountabllty - the supervisor and manager of the work process.
Cost savings Include: elimination of the quality control unit with the following positions and costs
Oncludes salary and ERE):
DOR - 37
OOR · 38
• Implement plan In accordance with State Personnel Rules.
• Communicate function reassignment plans with staff affected. Include specific changes In
process
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$ 49,752
One Taxpayer Services Technician III ( Grade 14) $ 26,538
One Taxpayer Services Technician II ( Grade 12)
Total
I CASEWORKER QUALITY CONTROL
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QUESTION
NEEDING
RESEARCH
PRESENT PROCESS
I CLERICAL UNIT SU'ERVISOR I CLERICAL UNIT WORKER
DOCUMENT
l'ULLS/ IlICRO
fIUl RESEARCH
EXHIBIT 9
QUALITY CONTROL UNIT
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CONDUCTI
CON'LETE
RESEAIlCH
1
GENERATE
HAIlDWJUTTEN
~
FORWARD
FILE
REVIEW
FILE
COftRES'ONDENC~
QUALITY
CHECK
' DOR · 39
CASE FILE
QUALITY
CHECK
I
IlAIL- OUTI
TAX'AYER
ADJUSTNENT
WU81- 6
CASEWORKER QUALITY CONTROL I
PROPOSED PROCESS
( ASSUMES ELIMINATION OF SE'ARATE QUALITY CONTROL UNIT)
TAXPAYER SU'~ T
CASEWORKER
QUESTION
WEEDING
RESEARCH
CONDUCT'
CON'LETE
RESEARCH
CASEWORKER UNIT
YY'IST'CLERK
DOCUMENT
' ULL'MICRO
FILM RESEARCH
I CASEWORKER SLWERVISOIt I UN IT MANAGER
EXHIBIT 10
QUALITY CONTROL UNIT I
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GENERATE YY'E J HANDWIlITTEN
CORRES~ DEIICE---+--"'" CORRES'ONDEIICE
CHECK, CORR.'
CON'LETE FILE t+---+-----... l
'--"'~
CASE FILE
L---...--+------ t~----+_-..., QUALITY CHECK ~--+--..
---..,... r--..
NAIL OUT'
..... v •• wr ...
'""'--" I~ n r ~~
ADJUSTMENT
OOR - 40
S'OT
CHECK
v
W4482- 6
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SALES TAX UCENSE ENFORCEMENT
The Department of Revenue enforces the Transaction Prlvlege Tax Ucense required of business
organizations by identifying, through a variety of research and Investigative methods, those businesses
operating without a tax license. Although large numbers of businesses have been identified through current
and recent past efforts, Agency staff feel that maximum enforcement efforts have not been reached. In this
connection, thirteen employees are currently Involved In tax license compliance efforts.
The strengthening of the enforcement efforts have taken place under the PIER Program ( programs
for Increased Enforcement Revenues). This was a program Introduced by the legislature In FY 1990- 91 and
again in 1991- 92 through which 297 new positions were established targeted specifically for revenue
enhancement activities throughout the Department. Some of the PIER positions have been placed In license
compliance activities.
Initial efforts In tax license compliance were highly successful. yielding close to one mUlion dollars
annually per license enforcement employee. Continuing efforts are stUt yielding significantly Increased
collections through these enforcement actions; most recent data shows that generated amounts equate to
more than $ 600,000 per year per employee. Even though compliance efforts are currently bringing In
smaller amounts of dollars because high priority ( large size) accounts were the Initial businesses brought
Into compliance. the Department feels that added effort will continue to bring In far more dollars than
costs.
Recomnw'fWiot1S
We recommend the addition of three enforcement employees to further strengthen the sales tax
license compliance efforts now underway. These employees could be distributed In both Phoenix and
Tucson to join the compliance efforts already underway.
DOR - 41
It Is estimated that the addition of each active enforcement employee will generate an average of
$ 200,000 per year In added sales tax license and sales tax remittances. Sixty percent of this amount would
accrue as added State revenue ($ 12O, OOO); the remainder Is added revenue generated for local
govemmental units through local government sales tax licenses and remittances.
Revenue enhancement to the State Is $ 380,000. The cost of persOnnel to Implement Is $ 74,520,
Including ERE.
There will be a one- time cost for fumlture and equipment of $ 25,500 and recurring costs of $ 5,000
for travel and other operating expenses.
Total annual DJt enhancement Is $ 280,480.
• Establish positions through the legislative process or through reassignment of other state
govemment positions
• Recruit employees and assign work
DOR - 42
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CORPORATE AUDIT RESTRUCTURE
The Corporate Audit section coUd be better organized In a way to maximize the use of Its work
force to eIficientIy manage Its work flow. The Corporate Audit Section has four Field Audit units which are
responsible for the on- site auditing of corporations. There Is also one OffIce Audit Unit which, In addition
to providing all support and clerical services to the entire section, Is responsible for conducting a variety of
audits using IRS and Internal reports. The Office Audit unit does all of Its work - in- house- and does not
conduct field audits.
The present organizational structure of the Corporate Audit Section reflects a limited number of
clerical staff to support the Section's work ( see exhibit 11, DMslon of Tax Enforcement, Corporation Audit
Section - Present Organizational Structure). It also reflects a very broad span of control for the OffIce Audit
unit supervisor with a mix of clerical positions, Exam Teehs and Revenue Auditors. The present organization
has a preponderance of auditing functions directed in the field audit activities.
Previous additions to staff have resulted in Increased revenue generations. In this connection,
additional opportunity exists to increase revenue generations. However, based on the following
considerations, Agency management has no plans in the current budget cycle to specifically increase
staffing:
1) Numerous new positions have been added In the last few years
2) Agency management wants to use current staffing more efficiently.
Under the present organizational configuration with Its shortage of clerical support and
preponderance eX positions dedicated to field audit activities, the Corporate Audit Section has been forced
to use Its Exam Tachs to · do data Input and other clerical functJons rather than doing simple office audits,
and research. Office Audit functions are restricted to existing staff, thus limiting the unit's overall audit
aetMty. Office audits generate more revenue per auditor at less cost for salary and travel than field audits.
Anally, the span of control for the OffIce Audit Supervisor Is currently 17 positions, and includes a mixture
of support functions as well as office audit functions.
DOR - 43
8ecorm_ tietfo-.
We recommend the following Improvements:
• Create a new unit to handle support functions for the Corporate Audit 88dIon. this
wli relieve the Audit Supervisor from having to supervise support staff and
consolidate support functions In a single unit.
• Establish an Administrative Support Supervisor I position ( grade 14) to supervise this
proposed unit. This position Is required to address the unit's support aetlvltles.
• Establish two additional Clerk Typist / I ( grade 9) positions to augment existing
clerical support. This will allow the Exam Tachs to be relieved of clerical
responslbBltles and free them for research and tax audit work.
• Transfer all examiner techs and existing and proposed clerical support staff to the
Administrative Support unit. This concentrates support functions In one central
location under one supervisor.
• Establish two additional Revenue Auditor III positions ( grade 18) and locate them In
the Office Audit unit. This enhances the office audit unit's capabUIty to Increase
collection.
• Downgrade three Revenue Field Auditor II positions ( grade 19) to create the two
Revenue Auditor III positions and to create some of the funding for the establishment
of the Administrative Support Supervisor and the Clerk Typist / I positions. The
remaining position and funding can come from positions eliminated in other
recommendations:
( See Exhibit 12, Division of Tax Enforcement - Corporate Audit Section, Proposed Organizational
Structure for detaUs.)
DOR · 44
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The following benefits wli be realized:
• Downgrading two of the three Revenue Field Auditor II positions ( grade 19' 8) to
Revenue Auditor III positions ( grade 18) wli yield an annual savings of $ 5,988. This
Is calcUated on the basis of midpoint salary for a grade 18 at $ 29,203 per annum
versus the midpoint salary of a grade 19 at $ 31,647 per annum, plus a .225
Employee Related Expense ( ERE). This Is $ 2,994 per position times the two
positions
• Downgrading the third Revenue Field Auditor II position ( grade 19) to an
Administrative Support Supervisor I position ( grade 14) will yield a savings of
$ 12,229 per annum. This Is calculated on the basis of a mid- point salary for an
Administrative Support Supervisor position ( grade 14) at $ 21,664 versus the salary
for a Revenue Aeld Auditor II ( grade 19) at $ 31,647 per annum, plus a .225 ERE
• Downgrading the three Revenue Aeld Auditor III positions ( grade 19) will generate
$ 30,000 in savings. Each position currently expends $ 10,000 per year on In- state
and out- of- state travel
• These savings and some savings from other recommendations generated can be
used to establish the two proposed Clerk Typist II position ( grade 9) at a cost of
$ 39,352, including ERE
• Restructuring of the Section for Corporate Audit improves efficiency, maximizes the
use of Its staff and generates savings
• Establishing two more clerical positions and an Administrative Support Supervisor
position allows the three Exam Teehs to begin to conduct simple office audits
instead of the clerical functions they are now performing. The anticipated revenue
to be generated through the redeployment of the Exam Techs Is projected to be
$ 1,500,000 per year
DOR - 45
• Reclassifying the Revenue Field Auditor II's to the OffIce Audit position of Revenue
Auditor III wli yield the following changes In revenues:
- The average Revenue FIeld Auditor II generates an average of $ 350,000 In collections per
year. Downgrading three positions retUts In a projected loss of revenue on the field audit
side of $ 1,050,000 per year
- The average OffIce Auditor ( Revenue Auditor III wli generate an average of $ 750,000 per year
In collections. Adding two new OffIce Auditors wli result In projected revenues of $ 1,500,000
per year
- The net gain In revenues from these two sections Is $ 450,000 per year
• Total recurring savings In staff and travel for this recommendation In State dollars
Is $ 8,865 per year
• Total prQjected revenue for this recommendation Is $ 1,950,000 ($ 1,500,000 from the
Exam Techs and $ 450,000 from the two OffIce Auditors.
Grand Total = $ 1,958,865
( There will be a one- time cost for five networked personal computers with software - estimated to
be $ 25,000).
1-- 1 ......,. .....".
• Develop reorganization proposal and submit along with required paperwork to
agency management for approvai and routing to Personnei
• Agency budget request should reIIect added clerical position or a position within
DOR shotJd be reallocated to Corporate Audit
• Transition Exam Tech to doing simple audits. This should Include training, etc.
• Develop plan for expanded OffIce Audit activities based on known workload.
DOR - 46
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- - - - - - - - - - - - - - - - - - -
DEPARTMENT OF REVENUE
DIVISION OF TAX ENFORCEMENT
CORPORATE AUDIT SECTION
PRESENT ORGANIZATIONAL STRUCTURE
EXHIBIT 11
§
~
RE'IBU' FIelD AllHINISTRATIVE
AWIT I1ANAGBI SECRETARY I
GRADe 23
I--
GRADe 12
1
I
r I I I I I
~ 1I. t: FIELD RE'IBU' FIELD RE'IBU' FIELD RE'IBU' FIELD ~ Mn RE'IBU' FIELD
AW: T SIJ'I'( IIT AWIT SIJ'I'( IIT AWIT SlI'I'CIlT AWIT SIJ'I'( IIT AWITlJI III
lJlAIlE 21 GRADe 21 GRADe 21 GRADe 21 GRADe 19 GRADe 2e
1 1 I 1 1 1
~ 1 « E FIELD REVEIU! FIELD RE'IBU' FIELD RE'IBU' FIELD RE'IBU' AWITlJI RE'IBU' FIELD
AllITlJI III AWITlJI III AWITlJI III AWITlJI III III AWITlJI II
GF'AIlE 2e GRADe 2e GRADe 2e GRADe 2e GRADe 18 GRADe 19
4 4 4 4 9 1
[!'- REVEIU! FIELD RE'IBU' FIELD RE'IBU' FIELD REVEIU! AWIT II
AllITlJI II AWITlJI II AWITlJI II AWITlJI II
Gl'AIlE 19 GRADe 14 GRADe 19 GRADe 19 GRADe ! 7
5 7 5 2 3
CLERK moIST III EXNIINER TEOi I
GRADe 11 GRADe 12
I 3
ClERK moIST III
GRADe II
1
ClERK moIST II
GRADe 9
1
CJ'FICE AlIIIT
NIl SIJ'I'( IIT
SERVICES IJIlT
lIEX4A-{>
DEPARTMENT OF REVENUE
DIVISION OF TAX ENFORCEMENT
COPORATE AUDIT SECTION
PROPOSED ORGANIZATIONAL STRUCTURE
EXHIBIT 12
REVEJU: FIElD RE'IEIU FIElD
AlllITlJl II AlllITell III
EIIWlE 19 GRADE 2.
1 I
~• S
_ IIC! ~ '' IIOI£ ST
I I
AllIlIIET'IESIlUI'E: RFVIEISlDIJI .... MIl~~~ _ 21 EIIWlE 21
I 1
RMEVIlEIJTUl: JIFIIEILID Il~. 1! ittlnD
EIIWlE 2t IlRAIl£ 2t!
4 4
IIE'IEIU: FIELD IIE'IEIU: FIELD
. II. OITlJI II . II. OITlJI II
IlRAIl£ 19 0RAIl£ 19'
5 4
FIElD AIlDn
IJIIT
PtaNIX
] REVEJU: FIELD AOItINISTRATIVE
AlllIT IIAHAGER SECRET.\ RY I
GRADE 23
'--
GRADE 12
1 I
I I I I
. II. OREITVESJlUI': ERFIVEILSDlll . II. OIIEIT'IESIlUI': ERFVIEILSDIJI ~ I~ IT ~ SII'I'SlIJII lIT
GRADE 21 GRADE 21 -" _ 14
I I I I
IIE'IEIU: FIELD IIE'IEIU: FIELD ~ IfI'I1lJ1 ! XNIJII! II reat I
MIlITlJI III . II. OITlJI III
llRJlOE 2t llRJlOE 2t _ II _ 12
4 4 " 3
IIE'IEIU: FIELD IIE'IEIU: FIELD ~ I. II. OITlJI CI. fII( TYPIST III
. II. OITlJI II . II. OITlJI II
llRJlOE 19 llRJlOE 19 _ 17 _ II
5 2 3 I
CLERK TYPIST III ClERK TYPIST II
GRADE "
GRADE 9
1 3
TUCSlJI FIELD
AlllIT lMIT SII'I'lIlT SERVICES
Fell SECTION
• PIO'OS£ O ESTABlISIttEIIT a' AOItINISTRATIVE SII'I'lIlT 9~ I POSITION ( 4) TO SlI'ERVISE SII'I'lIlT SERVICE
PIO'OS£ O ESTAlllISIttEIIT a' NEll CLEIlII; TYPIST II ( IJtIJJE 9) TO P! l7t' 10E NEEDED ClERICAl SlJ'I'CllT m~ TJim ff~~ I9~ IIV< n; S~~ nUt[~~~~ IIII(~ AmFIEO TO ( 2) REVEJU: MIlITlJI III ( GRADE 18)
._ PIO'OS£ O ESTABlISIttEIIT a' ( 2) RfIEllJE MIlITlJl III IIlRAIl£ 18) TO INCREASIE a'FICE MIlIT ACTIVITIES
- __ 48
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WITtt10lDING TAX TRANSFER
Employers In Arizona are required to Interact with two State agencies In the collection and audit of
withholding and unemployment Insurance taxes.
The Department of Revenue ( COR) Is responsible for tax collection and audit activities for employer
withholding tax and the Department of Economic Security's ( DES) Is responsible for the Unemployment
Insurance ( UI) Program. Both Agencies relate with the same employers In the collection and audit activities
for unemployment Insurance tax. There Is a 98% match of employers between the two tax areas.
Both DOR and DESjUI employ staff to process tax payments and to perform audits of Arizona
employers. Each agency maintains separate time frames, procedures, and forms, for tax submittal, and
conducts audits using their own methodology and schedules. It should be noted that there are two Field
Auditors assigned to the withholding unit at DOR and 45 Auditors In the UI Tax Program.
There are two major state agencies Interacting with the same employers, each utUlzlng different staff.
collection and audit methodologies, forms, and scheduling.
This situation results In dUplication of effort, specifically In the audit area, but more Importantly Is a
significant burden for employers. Employers are required to follow two different sets of guidelines, to
schedule different dates for audits, and to utUlze different forms In order to comply with the two State
agencys' policies and procedures.
There Is also a disparity In the level of audit coverage between the two agencies. WIth only two
auditors In DOR assigned to Its withholding audit program, the number of audits conducted Is far fewer than
the DESjUI Tax side which employs 45 auditors. This obviously Increases the possIbUlty that non- payment
and other violations such as late payment and underreportlng wli go undetected by DOR Field Auditors.
This translates to lost revenue and non- compllance with Arizona tax code.
DOR - 49
We recommend the following Improvements:
• Transfer the withholding tax responsIbilties d DOR to the DES/ UI Program along with all staff
currently specifically identified to the withholding area, except audit staff
• Perform an analysis to determine the number d FTE positions working within the withholding
tax area, specifically In the document's processing, data entry, data processing, Comptroller, and
collections area, and transfer positions associated with the number of FTE positions to DES
• Standardize policies, procedures, and forms
• Reassign each of the two Revenue Field Auditors currently employed to conduct withholding
audits back to the Sales and the Corporate Audit Section respectively.
• The auditor reassigned to Sales Audit will generate $ 420,000 In collections annually
• The auditor reassigned to Corporate Audit wHl generate $ 350,000 In collections annually
• Total revenue to be realized by redeploying these two staff Is sno, ooo annually
• Eliminates major over1applng functions and creates one tax entity for employers to deal with In
the UI and Withholding Tax areas
• Significantly reduces workload and procedUral complexity for employers
• WIll provide for much broader coverage In the withholding tax auditing of employers
• UI staff Indicate there are significant savings to be realized but the actual dollar figures are
not available ( no historical data)
DOR - 50
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- There will need to be shared cost ( per Federal law) of the 45 UI auditors since they cannot
do State work using Federal funds
- There will be start- up costs, Including EDP and planning for which State dollars will need to
be made avalable. These costs are dlfflcllt to estimate at this time
- The shared costs and start- up costs should be more than offset by the revenues generated
through comprehensive audits.
• legislation needs to be amended to facDltate transfer
• Set- up a transition task- force comprised of key staff from both agencies to develop a transition
plan ( general funds to cover salaries of federally funded task force members will need to be
appropriated)
- Analyze EDP requirements and budget
- Analyze personnel needs, Including existing dedicated staff and FTE's at DOR ( previously
identified)
- Identify other Issues pertinent to transfer and make recommendations
• Develop shared cost methodology per federal law, for audit staff and budget accordingly
• Develop budget for other up- front costs identified
• Implement transfer over an 18 month transition period
• Start- up and shared staffing costs are to be determined In Implementation phase. However,
these costs should more than be offset by the revenues generated by Increased and enhanced
audit activities.
DOR - 51
QUAUTY CONTROl RJNCOONS - AD'S OFACE
There are two Quality Control ( QC) positions ( Revenue Field Auditor Ill's · grade 19) organizationally
housed In the AssIstant Director's office. However, we find that they are not engaged In significant QC
aetMties.
These two positions are theoretically supposed to be used for randomly reviewing audits In the
Individual, withholding, sales and corporate audit areas. The two positions report directly to the AD's
Executive Staff Assistant. In discussing their activities, one of the Individuals commented that they do few,
If any, random reviews of case audits.
I" I"!
As one of these two positions Is not actively engaged In QC reviews and as updated Supervisory
revl8YI functions should allow for Increased QC, one of the two positions Is lost to production audit
functions. In effect, the Department and the State loses the revenue this audit position can generate.
R8CQITII118I tiptior IS
We recommend one of the quality control positions be transferred back to the sales tax audit section
and assigned a caseload. We further recommend the remaining quality control position concentrate on
quality control work In the Individual Audit SectIon, per the Auditor General's report...
• The sales tax audit position wUl generate approximately $ 420,000 per year In actual collections.
DOR - 52
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• Transfer the Revenue Field Auditor position back to the area Identified
• Assign caseload.
oOR - 53
INDIVIDUAL INCOME TAX AUDfT
The Individual Income Tax Audit SectIon Is responsible for the auditing of Individual income tax and
employer withholding taxes.
To ensure consistency and accuracy in the performance of audits, the Individual Income Tax Audit
Section has reassigned a Revenue Auditor III in each of Its seven units located in Phoenix and Tempe to
review ail audit findings. This was done because of the broad spans of control managed by the Revenue
Audit Unit Supervisor I positions in each location. In this connection the Revenue Audit Unit Supervisors
do not have adequate time to review audits themselves and typically review a case only if an informal review
of findings Is requested by the taxpayer.
The large spans of control do not permit the Revenue Audit Unit Supervisors to do the audit reviews
which should be an Integral part of their duties ( see Exhibit 13, Individual Income Tax Audit Section, Present
Organizational Structure. and Exhibits 14- 17 for Unit Organizational Structure).
This situation requires that they assign a Revenue Auditor III to do new reviews. Since they are
doing audit reviews almost full- time they are not avaDabie for audit production work which Is the Revenue
Auditor Ill's primary responsibUIty.
We recommend the following actions to Improve spans of control and workload distribution.
• Reclassify five of the Revenue Auditor III ( grade level 18) positions to Revenue Audit Unit
Supervisor I's ( grade level 19) to create four additionai audit units. In this connection, we
recommend the following specific actions:
- Allocate two of these units to the Phoenix office
- Allocate two of these units to the Tempe office
OCR - 54
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- Abolish a Clerk Typist II ( grade level 9) to create funding for the reclassification of this
position which does correspondence is earmarked for elimination from the Administrative
Support Unit. A new letter package is being implemented on the computer system which
will reduce this position's workload)
• Restructure the existing and new units to equalize spans of control ( see exhibit 18, Individual
Income tax Audit Section - Proposed Organizationai Structure, and exhibits 19- 22 for Unit
Organizational Structure).
• Reallocate the remaining two Revenue Auditor III positions to do actual audit work
• Assign audit reviews to unit supervisors
• The two Revenue Auditor III positions which are reallocated to full- time audit activities wUl each
generate $ 353,000 in collections annually for a tg.;! of $ 705.000 In new revenue
• The abolishment of a Clerk Typist II ( grade level 9) position wUl create $ 16,062 salary plus $ 3,614
ERE (. 225) for total avalable funds of $ 19,676 to effect reclassification
- The cost of reclassification wUl be $ 14,965 ( the difference between grade 19 and grade 18
at the mid- range salary level plus .225 ERE)
- § a! ary savings of $ 4.711
• Provides for the proper span of control to facDltate the assumption of audit reviews by
supervisors.
IDJJIegw," i!!
• Abolish clerical position to create funds for reclassifying Auditor III position
• Create five additional Revenue Audit Unit Supervisors from five of the seven Revenue Auditor III
positions currently engaged in full- time review activities
DOR - 55
• FBI new positions and restructure units per Exhibits 18- 22. PrQPOS8d Organizational StructyrU
• Restructure the Unit Supervisors positions to Include review functions.
• Reassign the remaining ( 2) Revenue Auditor III positions to full- time audit activities
• Athorough analysis of the clerical pool ( Administrative ServIces) needs to be conducted to
determine If It can be realigned to address work In a more efficient manner. The change to a
new letter package system also mandates a need for review
• An analysis of the Tucson office audit and clerical functions needs to be conducted for possible
restructuring consistent with the Phoenix and Tucson office alignments. There may be some
Increased costs associated with changes, If implemented
• Purchase networked personal computers for newly created supervisor positions. Estimated one­time
cost of $ 25,000.
The withholding unit is not reflected In the proposed organizational chart since it was recommended
that the withholding tax activities be transferred to DES ( see Withholding Tax Transfer for further
information).
DOR - 56
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- - - --, - - .... - _.. -- - - .. .. -
§
~
DEPARTMENT OF REVENUE
INDIVIDUAL INCOME TAX AUDIT SECTION
PRESENT ORGANIZATIONAL STRUCTURE
ADMINISTRATION ADMINISTRATOR PIlOGRAM & PROJECT
SECRETARY I INDIVIDUAL INtDME SPECIALIST II
TAX AUDIT SECTION
ORADE 12 ORADE 23 ORADE 19
1 POSITION 1 POSITION 1 POSITION
I I I I
Il£ V! NUE AUDIT ADMINISTRATIVE REVENU€ AUDIT REVENUE AUDIT Il£ V! IIUI! AUDIT
SUPERVISOR II SUPPORT SUPV III UNIT SUI'V I UNIT SUPV I UNIT SUI'V I
eRAOE Ie GRADE 17 GRADE 19 ORADE 19 eRAOE It
I POSITION I POSITION 1 POSITION I POSITION I POSITION
I I ,-----------------------------._---------------------,
EXHIBIT 13
PHOENIX ADMIN SUPPORT
PHOENIX/ TEMPE
TUCSON TEMPE
V4DOR- 3
DEPARTMENT OF REVENUE
INDIVIDUAL INCOME TAX AUDIT SECTION
PR[ SENT ORGANIZATIONAL STRUCTURE
PHOENIX
EXHIBIT 14
~.
~
ADMINISTRATOR
INDIV. INCONE TAX
AUDIT SECTION
GRADE 23
1 POSITION
IlEVENUE AUDIT
UNIT SUPV II
GRADE Ie
1 !' OSITION
I I I I I I
llEVENUE AUDIT IlEVI! NUE AUDIT IlEVEIIUE AUDIT REVENUE AUDIT REVENUE AUDITOR IlEVENUE AUDITOR IlEVENUE FIELD
UNIT SUPV I UNIT SUP'V I UNI'r SUPV I UNIT SUP'V I III III AlIOITOR II
0IlADE 19 ClIlADE 19 GRAllE 19 ClIlADE 19 0IlADE III IllADE 11 ClIlADE 19
I !' OSITION I P'OSITION I I'O! IHION 1 P'OSITION 4 P'OSITIDMS 4 P'OS ITIOIlS Z POSITIOIlS
HEARINO UNIT " IEL. D AUDI
IlEVENUE AUDITOR IlEVENUE AUOITOR IlEl/ EIIUE AUDITOR IlEVENUE AUDITOR IlEVEIIUI! AUDITOR
III III III III II WITHHOL. DIN
l- i-' r-- r-- I-
0IlADE III GllADE III ClIlADE III ClIlADE III IllADE 17
3 P'OSITIOIlS S P'OSITIONS ., !' OSITIONS 3 P'OSITIOIlS 3 I'OSITIOIlS
IlEVENUE AUDITOR IlEVENUE AUDITOR IlE11EMUE AUDITOR IlEVENUE AUDITOR ElIM TECH I
II II II II - - - I- '-
0IlADE 17 0IlA0E 17 GRADE 17 0IlADE 17 0IlADE IZ
4 !' OS IT IONS 3 !' OSITIONS ., P'OSITIONS 5 P'OSITIONS I P'OSITION
TBA UNIT
EXAM TECH I EXAM TECH I E:< AM TECH I EXAM TECH I
~ - - -
GRADE 12 GRADE 12 IHlADE IZ 0IlADE 12
4 POSITIONS 4 POSITIOIlS 4 POSITIONS Z P'OSITIONS
I I
•... -------- ..... --- •.••.•••.•• - .. - AUD IT FUNC T IONS ---------- •....•....•.•..•........•. -.
T
o
___....__..... .. •... J.. I!!!!!!-.;;.. - I!!!____ ---- ~
- - _.. -._-----' .. _-_ ...
DEPARTMENT Of REVENUE
INDIVIDUAL INCOME TAX AUDIT SECTION
PRESENT ORGANIZATIONAL STRUCTURE
TEMPE
ADMINISTRATOR
INDIV. INCOME TAX
AUDIT SECTION
GRADE 23
1 POSITION
- -
EXHIBIT 15
-
REVENUE AUDIT I I REVENUE AUDIT
SUPV I SUPV I
§ I GItADE 19 GRADE 19
1 POSITION I POSITION
I
~ U REVENUE AUDITOIl REVENUE AUDITOR
III III
GRADE III GRADE III
7 POSITIONS II POSITIONS
REVENUE AUDITOR REVENUE AUDITOR
II II
1- 1
GRADE 17 GRADE 17
6 POSITIONS 5 POSITIONS
EXAM TECH I I EXAM TECH I
Y
GRADE 12 I ClIIADE 12
2 POSITIONS 2 POSITIONS
I .. ~--~---
V400R- 7
DEPARTMENT OF REVENUE
INDIVIDUAL INCOME TAX AUDIT SECTION
PRESENT INCOME TAX SECTION
TUCSON
EXHIBIT 16
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ADMINISTMTOIl
INDIV INCOME TAX
AUDIT SECTION
GMDE Z3
I POSITION
I
REVENUE AUDIT
UNIT
SUPV I
GRADE 19
I POSITION
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IIEVENUE AUDITOIl REVEIIU£ AUOITOIl REVENUE AUDITOIl EXM TECH I CLERK TYI'IST SECRETNty
III II I III
GIIAD£ 12 GIIAD£ 11
GRADE Ie GIIAD£ 17 GRADE 16 GRADE 11
< 4 POSITIONS 4 POSITIONS 1 I'OSITIOM 2 !' OSITIONS 2 !' OSITIONS 1 !' OSITION
- - - ~- .. - - - - - - .. - _.. - - -
~
a... t
DEPARTMENT OF REVENUE
INDIVIDUAL INCOME TAX AUDIT SECTION
PRESENT ORGANIZATIONAL SECTION
ADMINISTRATIVE SUPPORT
ADMINISTIlATOIl
INDIV INCOIlE TAll
AUDIT SECTION
GRADE 23
1 ~ OSITION
ADMINISTIlATIVE
SU~~ OIIT
SU~ V III
GRADE 17
I ~ OSITION
I I
ADMINISTIlATIVE ADMINISTIlATIVE ADMINISTIlATIVE
SUI'I'OIIT SU~ I'OIIT SU~ I'OIIT
SUI'V I SU~ V I SU~ V I
GllADE 14 GRADE 14 0IlADE 14
1 ~ ITIOIl I ~ OSITION 1 ~ 1TION
ACCOUNTING INFORMATION CLERK TY~ IST
TECH II ~ ItOCESSING III r-- r-- SU~ V I - GRADE 11 0IlADE 14 GllADE 11
1 ~ ITION 1 ~ ITION 3 ~ ITIONS
CLERK TY~ IST CLERK TY~ IST CLERK TY~ IST
III III II
f0- r-- -
GRADE 11 GRADE 11 0IlADE 9
4 1' 05IT IONS 4 ~ OSITIOIlS 2 ~ ITIONS
TEMPI!
CLERK TY~ IST CLERK TY~ IST
...... II '- II
GRADE 9 GRADE 9
6 ~ OSITIONS S I'OSITIONS
EXHIBIT 17
PHOENIX PHOENIX
V4DOR- 5
EXHIBIT 18
DEPARTMENT OF REVENUE
INDIVIDUAL INCOME TAX AUDIT SECTION
PROPOSED ORGANIZATIONAL STRUCTURE
TEMPE
I, ._._._. ._. ._. __ ._. . ft ._ ••• _. ._._. ••• • __ ._,
PHOENIX TUCSON
ADIUNISTMTIVE AOMINISTftATOII P' 1lOClIlAIl & P'ItOJECT
SECftETARY :[ INDIV INCONE TAX SP'EC IALIST II
AUDIT SECTION
0ftA0E 12 0ftA0E 23 OIIAOE 19
1 ,. OSITION 1 !' OSITION 1 !' OSITION
I I I I I I
AONINISTMTIVE ftEVENUE AUDIT ftEVENllE AUDIT ftEVENUE AUDIT ft£ VENUE AUDIT ftEVENUt: AUDIT IlEVENUE AUDIT
SU" P'OIIT SUP'V III UNIT U1IIT UNIT UNIT UNIT UNIT
SU,. V II SUP'V I SU,. V I SUP'V I SUP'V I SUP'V I
CJftAOE 16 0ftA0£ 2e 0IW:' f 19 eAADE 19 CJftAOE 19 CJftAOE 19 0lWlE It
1 !' OSITION 1 ,. OSITION 1 ~: ITION 1 ,. OSITION 1 I' 05ITION 1 I' 05ITION 1 1' 05IT 1011
!
ADMIN SUPPORT
PHOENIX/ TEMPE
~•
I
( PAGE 5 OF 5) ( PAGE 2 OF 5) ( PAGE 4 OF 5) ( PAGE 3 OF 5)
____....-......._-- 1_- 1_;- '-.-.. ..-~-,
- - - - - - -, .... .. - - - - - .. - - -
DEPARTMENT OF REVENUE
INDIVIDUAL INCOME TAX AUDIT SECTION
PROPOSED ORGANIZATIONAL STRUCTURE
PHOENIX
AONINISTRATOII
INDIV INCONE TAX
AUDIT SECTION
GAADE 23
I POSITION
I
" EVENUE AUDIT
UNIT
SUPV II
GAADE 2.
1 POSITION
EXHIBIT 19
~
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, ....... "':::: I " EVENUl! AUDIT * " EVEIlUE AUDIT
21 UNIT UNIT UNIT
SUPV I SUI'Y I SUPV I
IIlADE 19 lJIIAD£ 19 lJIIAD£ 19
I POSITION 1 POSITION 1 POSITION
".....'"',... IH""...-.... IH ItEVENUE AUDITOII
III III III
GAADE IS lJIIAD£ 18 lJIIAD£ 18
2 POSITIONS 2 POSIT IONS 2 POS ITIONS
.."..,"",.. I " EVENUE AUDITOII " EVENUE AUDITOII
II II II
GAADE 17 lJIIAD£ 17 GAADE 17
3 POSITIONS 3 POSITIONS 3 POSITIONS
'-"~ J EXAII TECH I EXAII TECH I
GRADE 12 lJIIAD£ 12 GAADE 12
3 POSITIONS 2 POSITIONS 2 POSITIONS
I
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" EVEIlUE AUDIT " EVENUE AUDIT " EVENUl! AUDIT
UNIT UNIT UNIT
SUPV I SUPV I SUPV I
GAAD£ 19 GRAD! 19 lJIIAD£ 19
I POSITION I POSITION 1 POSITION
" EVENUE AUDITOII " EVENUE AUDITOII " EVENUl! AUDITOII
III III III
lJIIAD£ 18 lJIIAD£ 18 lJIIAD£ 18
2 POSITIONS 3 POSITIONS 3 POSITIONS
" EVENUE AUDITOII " EVENUE AUDITOII " EVENUE AUDITOII
II II II
GRAD! 17 GRADE 17 GRADE 17
3 POS IT IONS 2 POSITIONS 2 POSITIONS
EXAII TECH I
1 ~ EXAII TECH I EXAII TECH I
GftAD! 12 GRADE 12 GRADE 12
2 POSITIONS 2 POSITIONS 2 POSITIONS
1
IlEVEIlUf: AUDIT •
UNIT
SUPV I
lJIIAD£ 19
1 POSITION
IIEVEIlUf: AUDITOII
III
lJIIAD£ 18
3 POSITIONS
" EVEIlUf: AUDITOII
II
8RADt: 17
3 POSITIONS
EXAII TECH I
GRADE 12
2 POSITIONS
I
" EVENUE AUDITOII
III
lJIIAD£ 18
" POSITIONS
HEARINGS
UNIT
INDIVIDUAL INDIVIDUAL INDIVIDUAL INDIVIDUAL INDIVIDUAL INDIVIDUAL TBA UNIT
AUDIT
* NEW ' JNITS
AUDIT AUDIT AUDIT AUDIT AUDIT
, ~-
DEPARTMENT OF REVENUE
IND][ VIDUAL INCOME TAX AUDIT SECTION
PROPOSED ORGANIZATIONAL STRUCTURE
TEMPE
EXHIBIT 20
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INDIV INCOME TAX
AUDIT SECTION
GRADE 23
, I'OSITION
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REVENUE AUDIT * RI1VENUE AUDIT * REVENUE AUDIT REVENUE AUDIT
UNIT UNIT UNIT UNIT
SUI'V I SUI'V I SUI'V I SUI'V I
OIW) E " GRADE " GRADE ,.
1 I'OS ITION " I'OS IT ION 1 I'OSITION 1OII'WOS) EIT " ION
REVENUE AUDITOR REVENUE AUDITOR REVENUE AUDITOR llEVENUE AUDITOR
III III III III
'- - I-- - GRADE 18 OIW) E ' 8 OIW) E 18 eRAD£ 18
4 I'OS IT IONS 3 I'OSITIONS 3 I'OS I TIONS : I I'OSITIONS
REVENUE AUDITOR REVENUE AUDITOR REVENUE AUDITOR REVENUE AUDITOR
II II II II - - I-- I--
OIW) E 17 GRADE 17 GRADE 17 GRADE 17
2 I'OSITIONS : I I'OSITIONS : I I'OSITIONS : I I'OSITIONS
EXAlI TECH I EXAlI TECH I EXAlI TECH I EXAlI TECH I
I.- GRADE 12 - OIW) E 12 "- GRADE 12 - eRAD£ 12
1 I'OS I TION 1 I'OSITION 1 I'OSITION 1 I'OSITION
* NEW UNITS
..=,••""._-:~~- 1L ....~.. _ Ie
- -- -- .. -_ ... ---- ..... --
EXHIBIT 21
DEPARTMENT OF REVENUE
INDIVIDUAL INCOME TAX AUDIT SECTION
PROPOSED INCOME TAX SECTION
TUCSON
~,
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ADMINISTIIATOR
INDIV INCOME TAX
AUDIT SECTION
ORADE Z3
I POSITION
I
REVENUE AUDIT
UNIT
SUPV I
GRADE 19
I POSITION
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REVENUE I REVEIIUl! AUOITOR REVENUE AUDITOR EXAM TECH I CLERIL TYI'IST SECRETARY
III II I III
GRADE 12 ClftADE 11
GRADE IlIAD! 17 GRADE 16 ClftADE 11
.. 1' OS11 .. 1' OSITIONS 1 !' OSITION 2 1' OSITIONS 2 1' OSITIONS I !' OSITION
V4DOR- l1
§
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DEPARTMENT Of REVENUE
INDIVIDUAL INCOME TAX AUDIT SECTION
PROPOSED ORGANIZATIONAL SECTION
ADMINISTRATIVE SUPPORT
ADIUNISTRATOft
INDIV INCONE TAX
AUDIT SECTION
GRADE 23
I POSITION
ADMINISTIIATIVE
SUPPORT
SUPV III
GRADE 17
I POSITION
I I
AlIIUIIISTRATIVE ADIIINISTRATIVE ADIIIItISTRATlVE
SlII'I'OlIT SUPI'OlIT SlIl'l'OlIT
SlIl'V I SUPV I SlIl'Y I
llRADE I. GRADE I. llRADE 14
I POSITION I POSITION I POSIT 1011
ACCOUltTIIIG IIIFOIIIIATlOII CLERIl TYPIST
TECH II PIIOCESSIIIG III - r- SUPY I '-
ORAD£ 11 GRADE 14 llRADE II
1 POSITION 1 POSITIOII 3 POSITlOIIS
CLERIl TYPIST CLERK TYPIST CLERK' TYPIST
III III II - l- I.-
GRADE II GRADE 11 llRADE 9
4 POSITIONS • POSITIONS 2 POSITIOIIS
TEMPE
CLEIIK TYPIST CLERK TYPIST
II II - "-
GRADE 9 GRADE 9
6 POSITIONS • POSITIONS
EXHIBIT 22
PHOENIX PHOENIX
2 , 5 • 7 .. -- 7 _ .._ ",-_ 12 _
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OPPORTIJNITY COST OF MANUAL LEGAL RESEARQi
There are several sections within the Department of Revenue ( DOR) where personnel Involved In
various aspects of tax law require the research, analysis and Interpretation of legal Issues. Some current
procedures for performing legal research are Inefficient and reduce the productivity of various positions In
the Agency.
Tax PoI! cv Section
The Tax Policy Section consists of three units. The Policy Assistance Unit responds to taxpayers'
Inquiries by researching, analyzing and Interpreting tax law and Issues written ' etter Inqulrles-. The
Enforcement Assistance Unit reviews enforcement procedures and tax Issues and provides written
interpretation OegaJ briefs) to assist the Tax Protest Units In the Enforcement DMsion. The LegaJ Practices
and Procedures Unit is responsible for the promulgation of rules. The Tax Policy Section primarUy conducts
manual paper research in the library. Sometimes the Tax Polley Section has unlimited free access to
ArIzona State University's electronic legal research library through the University's two law student Interns
fulfilling their field practlcum at DOR. There are two electronic legal research library software systems
avaHabie for utilization by the student Interns. The WESTLAW and LEXlS systems are a computerized legal
research tools which lnable the user to query specific topics and quickly access tax Information.
Although the exact number of inquiries requiring legal research was not available, Tax Policy
personnel stated that they complete approximately 1,200 of these Inquiries per year In addition to their other
duties.
Hearings OffIce Section
The Hearings OffIce conducts hearings on taxpayers' petitions for review of tax assessments made
by the Department and Issues written decisions on the propriety of assessments. These written decisions
require manual paper research of legal Issues. Hearings OffIce staff udlze the electronic legal research
system at the Capitol Ubrary. The Capitol Ubrary charges DOR $ 3.00 per minute and 2.5 cents per line for
cOmplJler pilnt- ou'ts.
DOR - 67
Tax Policy
TABLE 1: FTE TIME DEVOTED TO MANUAL LEGAL RESEARCH
The Hearings Office has four FTE positions spending approximately 30% of their time conducting
manual legal research.
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$ 40,242
$ 13,414
$ 53,656
$ 37,223
$ 170,290
$ 46.506
$ 254,019
$ 20.23/ hr. X 920 hrs. = $ 18,611 X 2 =
$ 18.51/ hr. X 920 hrs.= $ 17,029 X 10 =
$ 16.85/ hr. X 920 hrs.= $ 15,502 X 3 =
$ 24.3O/ hr. X 552 hrs. = $ 13,414 X 3 =
$ 24.30/ hr. X 552 hrs. = $ 13,414 X 1 =
2 Tax AnaI. 111' s
10 Tax AnaI. II's
3 Tax Anal. " s
920 hrs. X15 FTE = 13,800 hrs.
DOR - 68
3 Hear. Off.
1 Admin.
552 hrs. X4 FTE = 2,208 hrs.
In 1989, DOR personnel considered purchasing a compact disc ( CD ROM) tax law library system
and contacted a local computer software company to explore software acquisition. However, the CD ROM
tax library system did not contain ArIzona Tax Law or a Property Tax component. DOR's efforts to obtain
the CD ROM software were discontinued.
Tax Policy has 15 FTE positions spending approximately 50% of their time conducting manuallegaJ
research. ( Based on 1,840 actual annual work hours per person.)
There Is an opportunity cost to the Department of Revenue for manual legal research. Manual
compared to automated legal research Is Inefficient, consumes more man- hours which reduces productivity,
and limits the amount of tax law Information/ sources avalable to personnel making legal rulings or preparing
for litigation.
Hearings Office
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• Total Hours of Research, Analysis & Interpretation = 16.008 or 8.7 FTE
• Total Value ( Research, Analysis & Interpretation) = $ 307,675.
We support DOR's desire to purchase Tax Law Ubrary software on compact disc ( CD- ROM) to
conduct legal research.
We also recommend the elimination of one Tax Analyst I ( Grade 21) In Tax Policy.
• Legal research software will increase productivity and reduce related manual procedures by
50%. Current annual backlogs of 60 Inquiry letters will be reduced and service levels to
taxpayers will dramatically Improve. This recommendation will effectively Increase the
productivity in the Tax Policy Section and the Hearings Office and increase the amount of time
available to accomplish the additional duties detailed below.
- The Tax Polley Administrator plans to devote the additional time gained to provide more
Information to the taxpayer, such as a Summary of ArIzona's Taxpayer's Bill of Rights;
produce more administrative tax policies and procedures; and shorten the response time to
taxpayers In issuing responses to Inquiries and preparing rules
- The Hearings OffIce Administrator plans to devote the additional time gained to Increase the
accuracy and shorten the response time In Issuing legal decisions
• Legal research software wli simplify legal research by Integrating materials In an Index which can
be queried and cross- referenced
• Legal research software wUl pravide COR with system enhancements in addition to case law
such as minute entries, up- to- date Information on statutes, newly enacted legislation, recently
reported court rules and orders
DOR - 69
• Legal research software Is compatible with DOR personal computers and word processing
software
• Legal research can be conducted within DOR and wli reduce the amount of staff time spent
away from the work area
• Computer hardware costs wli be minimal because DOR already has personal computers to
utUlze legal research software
• The legal research software wli provide the monthly updates on case law, statutes, regulations
and rulings to DOR personnel Issuing letter rulings, legal briefs or to assist DOR in preparing for
appeals and litigation
• The legal research tools will be accessible to all DOR personnel conducting research through
a LocaJ Area Network.
It is important to note that one aspect of conducting legal research will not be impacted by the
addition of the CD ROM software. Tax Polley and Hearings Office staff will continue to have to leave their
work areas to access specific tax cases through the WESTLAW or LEXJS systems.
COST/ BENEFITS OF COMPUTERIZED TAX LAW UBRARY
Annual Savings
One Tax Analyst I + 22.5% ERE = $ 47,535
Annual Savings = $ 47,535*
* Iess current WESTLAW/ LEXJS costs spent ( Unable to be determined)
DOR - 70
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DOR - 71
Compact Disc ( CD ROM) Player $ 600
• Identify desired system features ( i. e., Estate Tax, Corporate Tax, Federal Income Tax etc.) .
S850jyr.
$ 425jyr.
$ 295jyr.
$ 1,795
$ 45,740
$ 22500.
Annual Costs
Net Annual Savings
Estate & Property Tax)
Federal Tax Service Software ( basic)
Revenue Ruling and Procedures
IRS PUblication on CD's
• Coordinate the purchase of a legal research software with DOR's Data Management personnel,
selected Computer Company and DCA Purchasing Office ( Requests For Bids, etc,).
Annual Costs
One- Time Cost
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PMSION CONSQUDATION
The Department of Revenue has six divisions:
• Taxpayer Information and AssIstance
• Tax Enforcement
• Data Management
• Property Valuation
• Admlnlstratlve8ervlces,
• Oversight and Analysis
The dMslons of ( 1) Administrative Services and ( 2) Oversight and Analysis contain 165 employees
with 15 sections and an average of 11 employees per section. The nine Oversight and Analysis sections
have less than nine FTE positions per section ( see Exhibits 27, Administrative Services, Present
Organizational Structure through Exhibit 34, Purchasing Section, and Exhibit 40, Oversight & Analysis,
Present Organizational Structure through Exhibit SO, Econometrics Section, Present Organizational
Structure). The units of both dMslons serve as administrative and program support for the larger line
divisions of Tax Enforcement and Property Valuation, as well as Data Management, and to some extent
provide support for the operational oversight of the Deputy Director's office.
As recently as 1991 the Agency was organized Into five dMsions Instead of the present six. Most
sections of the new Oversight and Analysis DMslon were previously located In either the Administrative
~-_..:_-- n;.. t_ I .. __.... =__-.... 1 .. aM........._ n __. I'fot., nl. I'V"' Wt"".. 1ft + hft nlpal" ltl'\ r'~ 1" dfi" 1:: Jj
~ al¥ l~ "" Y'~ IUII VI a~ I~ llgu "' 1." UIV ,", vtJU'J ..,. IIVVLUI III .." g .., uuw.. w' ' iii' ...,.... vw.
When reviewing the administration and work activities of the two divisions of Administrative Services
and Oversight and Analysis, a number of findings point to the potential for fewer management positions and
a broader span of control:
• Relatively high structyre to the work environment: For the most part, position functions and
responsibUItles In these two dMsIons are clearly defined and structured, requiring litUe guidance
or corrective action from management
DOR - 72
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• Standardized and routine services: Most services provided by these two dMslons are those
which are provided In any large reglAtory agency ( accounting, procurement, physical
properties and records management, pubilcatJons, administrative hearings, and s1mBar others).
Standard methods and procedures are used In carrying out objectives
• Low need for coordination between subordinates: Most sections are structured to function
Independently c: A each other and require little coordination on a day- tCHiay basis
• Use of organizational structure to provide oromotIonaI opportunities: As Is true In many areas
of state government, limitations - over the years - on pay Increases and Inftexlble job
classifications may have resulted In the creation of supervisory and managerial positions as
personnel rewards and Incentives.
WIthin the Administrative Services DMslon, three of the six sections reporting to the DMslon Director
are especially small:
• FacUlties Management, with three line employees headed by an administrator at a Grade 17
• Estate Tax and Fldyclary, with six line employees headed by an administrator at grade 14
• Pyrchaslng, with four line employees headed by an administrator at a grade 21.
Within Oversight and Analysis Division tour sections are exceptionally small:
• Hearings, with three line positions
• Centra! Information Serylces with two line positions
• Management AnalYSis with two line positions
• Econometrics with three line positions
DOR - 73
When reviewing the missions and the actual work activities of the entire agency, Including the
operational oversight over the dMslons provided by the deputy director, some appear out of alignment with
normal business unit structure.
• CentraJ Information ServIces within the 0 & A DMsIon functions as an Independent
liaison/ coordinator/ troubleshooter between data processing personnel and the Property
Valuation DMsIon and the various County Assessors to ensure that the needs of the users are
understood by the data prOC888ing personnel. and the technical aspects and capablities of data
processing are understood by the users
• Taxation System Support within the 0 & A DMslon serves as data processing quality control
for taxation systems and provides Impact analysis for proposed data systems, systems
eventually established by the Data Management DMslon. It also functions as an Independent
liaison between data processing personnel and the users ot the non- property tax systems
• The 0 & A section of Bingo administers licensing and report processing slmUar to other special
tax administration. All other special tax administration ( those not associated with the - Big Four­ot
Individual Income, Corporate Income, WIthholding and Sales) Is handled within the
Administrative Services DMllon
• Management Analysis Is the smallest section In 0 & A, but Is separate from Internal Audit both
of which are a research and analysis function. Together with Tax Polley and Econometrics, all
relate to Agency operational oversight aetMtles cutting across all divisions, aetMtles normally
administered by an agency deputy director
• Community Activities/ Publications Is a section Involved In providing educational and
Informational materials and presentations to the public and the accounting community as well
as throughout the agency
• WhUe the Hearings Section could be administered at any organizational location away from the
tax polley decision, the fact that this section provides the 1st level review, with the Director's
OffIce providing the appeal review, suggests that this office Is best considered a support
function organizationally distant from both tax decision and second level appeal.
DOR · 74
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In summary, consolidation and realignment opportunities can permit DOR to effect cost savings In
both Division management and section administration.
A review of the 15 sections' responslblltles and duties, and a comparison of the operating
objectives and missions of the two dMslons clearly Indicate an over- specialization of functJons and
corresponding organlzational units. The resth Is that an excessive. number of administrative units are In
place In each dMslon, each with Individual managers and supervisors; some units have only marginal
distinctions between their respective objectives.
Overall, the ratio of management/ supervisory positions to line employee positions Is unusually high:
1 to 3.9. Individually, the two dMsions' ratios are as follows:
• Administrative Services DMslon: 1 to 4.4
• Oversight and Analysis DMsion: 1 to 3.3.
Even though some of the section managers' positions are at relatively low grades, the low ratios
produce a significantly high cost of management for each dMslon. In the two dMslons combined, $. 46 Is
spent on management/ supervision for every dollar spent on labor Olne employees).
We recommend implementation of the following Improvements: ( see Table A, Proposed DOR
DMsion Consolidation)
• Merge selected individual sections with s1mlar operational objectives Into one unit. In this
connection, merge the Management Analysis Section with the Internal Audit and Investigations
SectIon and transfer the naw combined unit to the Deputy Director's Office ( see exhibit 24,
Department of Revenue, Proposed Organizationai Structure).
this change will align two closely related functions ( audit and analysis) and merge two small
administrative units.
DOR - 75
• Transfer Taxation Systems Support ( TSS) and Central Information Support ( CIS) from the
Oversight and Analysis Division to the Taxpayer Support DMsIon. This move maintains their
Independent position In a neutral division but also serves to move TSS closer to Taxpayer
Information and Assistance which often receives the first Indications ci potential systems
problems ( see exhibit 24, Department ci Revenue, Proposed Organizationai Structure)
• Consolidate the two small units of Purchasing ( contains four line employees) and Faclltles
Management ( contains three line employees) with a third section ( Records Management). All
of these sections are presently located within the Administrative Services Division. This
combines small sections within a larger one and aligns all physical property management under
one administration ( see exhibit 6, Procurement and Faciltles/ Records Section, Proposed
Organizational Structure - Administrative Services Division)
• Transfer the small section called Estate Tax and Fiduciary, as a separate unit, to the
Comptroller's OffIce; this aligns this tax collection effort with the other special tax areas already
under the direction of the Comptroller ( see exhibit 5, Comptroller's OffIce, Proposed
Organizational Structure)
• Transfer the Bingo Tax Collection Section from the Oversight and Analysis DMslon to the
Administrative Services Division. This aligns the special tax collections functions but also
establishes Bingo with Its necessary high profile compared to other special taxes ( see exhibit
35, Administrative Services Division, Proposed Organizational Structure)
• Transfer the Community Activities and Publications Section from the Oversight and Analysis
Division to the Taxpayer Support Division ( see exhibit 24, Department of Revenue, Proposed
Organizational Structure). This aligns the section with other taxpayer Information functions
• Relocate the Oversight and Analysis Hearings Section, providing Independentadministrative due
process for taxpayers, to the Administrative Services Division ( see exhibit 24, Department of
Revenue, Proposed Organizational Structure)
• Transfer the two sections remaining In the present Oversight and Analysis Division to the Deputy
Director's OffIce. These are Econometrics and Tax Policy. These sections, like the audit and
analysis functions, aid In providing review and policy direction for all divisions ( see exhibit 26,
Special Support, Proposed Organizational Structure).
DOR - 76
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These recommendations Integrate the functions of the Oversight and Analysis DMslon ongoing
Agency functions:
• Staff support of the Deputy Director's operational oversight function
• Dissemination of Information to the taxpayer public In the Taxpayer Support Division
• Oversight and policy direction from the Deputy Director's OffIce
• Coordination with data users and data processing functions within the Taxpayer Support
DMslon.
• Comprehensive administrative support rendered by the Administrative Services DMslon
WIth this Integration, together with the consolidation of some units within the sections already
referenced, the following Improvements can be achieved:
• The overall ratios of management to line employees can be Increased
• Spans of control for IndMduai managers and supervisors can be expanded. thus more
efficiently administering programs and reaching objectives
• Administrative support functions will be aligned with the Administrative Services Division
• Other sections. formerty associated with the Oversight and Analysis DMslon. will be
appropriately aligned with line divisions or operational management areas
• The cost to manage Is reduced from $. 46 to $. 39 for fNery dollar spent on labor. This Is a
nominal reduction of 15 percent. Organizations typically have a cost to manage between $. 20
to $. 30. WIth this In mind, recommendation Implementation actions may rweal further
opportunities to reduce the cost to manage.
DOR - 77
• Communicate realignment to Department of Revenue employees who wUl be affected by
changes
Additionally, cost savings can be realized, as follows:
One Administrative Secretary I ( grade 12)
( from staff support to the Oversight & Analysis
Assistant Director)
One Records Management Supervisor ( grade 17)
( from a section merged with another)
One Executive Staff Assistant ( grade 20)
( from staff support to the Oversight & AnalysIs
Assistant Director)
One AssIstant Director ( grade 26)
( from Division Management In Oversight & Analysis Division)
Total
• Develop detaUed organizational Integration plan
• Submit plan to DOA Personnel
• Implement plan.
DOR - 78
$ 23,214
$ 33,066
$ 43,254
$ 14,976
$ 174,510
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TABLE A: PROPOSED COR DIVISION REORGANIZATION
Divhion Unit Recommended Action: Transfer/ Merge Comments FTE Action Required
O'Slght t Analysis Community Action & Pub. Transfer to Taxpayer Support
O'Slght t Analysis Econometrics Transfer to Deputy Director
O'Slght t Analysis Hearing Office Transfer to Admin. Services Dlv.
O'Slght I Analysis 81ngo Transfer to Admin. Services Dlv.
0' SI ght I Analysis Tax Polley Transfer to Deputy Direclor
O'Slght t Analysis Tax System Support Transfer lo Taxpayer Supporl
O'Slght I Analysis Central Info. Services Transfer to Taxpayer Support
O'Slght Analysis Management Analysis
Transfer both units to Depuly Director
Internal Audltl
O'Slght & AnalYsis Investigations Merge these two units
Merge w/ Procurement & Create new Procuremenl!
Admlnlslr'atlve 5vcs Records Management Facl lilies Managemenl Records/ Facll Illes Mgml. Unll
Merge w/ Procuremenl & Creale new Procurement! Eliminate ( I) FTE In
Admlnlstcative 5vcs Facilities Management Records Managemenl Records/ Facilities Mgmt. Unit Records Management
Administrative Svcs Estate Tax & Fiduciary Transfer to Complrol ler's Office
Merge w! Records Managemenl & Creale new Procurementl
Admlnlst'" atlve Svcs Purchasing Faci I Itles Management Records/ Facll Illes Mgmt. Unit
Eliminate ( l) A. D.
( I) Exec. Assistant
O'Sighl & Analysis Eliminate Division Management ( I) Admin. Secrelary
STATE OF ARIZONA EXHIBIT 23
DEPARTMENT OF REVENUE
PHESENT ORGANIZATIONAL STRUCTURE
DIItECTOII EXECUTIVE ASSISTANT
OENEML COUNSEL
OI'F ICE 01' THE LEGISLATIVE LIAISON
DIItECTOII ~ UBLIC INFORMATION
OI'FICEIt
I
DE~ UTY DIItECTOII AFFIRMATIVE ACTION
ONBUDSMAN
S~ ECIAL SU~~ T ~ EItSONNEL
~ LANNING AND
BUDGET
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ASSIST DIItECTOII ASSIST DIItECTOII ASSIST DIItECTOII ASSIST DIItECTOII ASSIST DIItECTOII ASSIST DIItECTOII
ADMINISTMTIVE DATA ~ ItOPEItTY VALUATION TAll TAX~ AYEIt OV£ ltSIGHT
SUVICES NAIlAGEIfENT I EOUALIZATION ENFOIICEMENT SU~~ OIIT & ANALYSIS
-- I HEARl... OfFICE
C~ TItOLLEit TAX ~ ItOCESSING ~ ItOl'EItTY COLLECTIONS TAX~ AYER IIll'O
r-- - - VALUATIOIl f- l- I ASSISTANCE
~ INTEltIlAL AUDITI - CRIIlIIlAL
I INVESTIGATIONS
! FACILITIES SYSTEII$ I ASSESSII£ NT SALEs/ USE ACCOUNTS - MAJIAOEIIENT f- ~ ItOGIW. UIIG - STANDARDS f- TAX AUDIT - ItECEIVABLE
I EQUALIZATION
IWIAClEIIENT
I"'"" ~ LYSIS
ItECOIIDS SYSTEMS INDIVIOUAL LICENSE I
- MANAGEMENT I- ENGINEEItING I- INCOME TAX AUDIT - IIEGISTMTION -- I ECOIIONETIIICS
ESTATE TAX DATA ~ IIOCESSING COII~ OItATE ~ ENALTY TAX
l- I FIDUCIAllY - Ol'EMTIONS L-. INCOME TAX AUDIT - ItEVIEW - ~ LICY
CONIIUNITY
TMINING TECHNICAL - ACTIVITIES I
f- - SU~~ OIIT ~ UBLICAT IONS
- CENSTYMSLTEIIINSFO
~ UIICHASING INFORMATION
L-. - CENTEIt
1 TAXATION
SYSTEMS
SUPPORT
DATABASE - ~ PLICATIONS
- ~ .-.;, - - .=- - l; P- -_'. 7 - I_ .- - .... - ~: LII - - - -
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C.. l. D.
STATE OF ARIZONA
DEPARTMENT OF REVENUE
PROPOSED ORGANIZATIONAL STRUCTURE
DIRECTOIl EXECUTIVE ASSISTANT
GENERAL COUNSEL
OFF ICE OF THE LEGISLATIVE LIAISON
DIRECTOIl PUBLIC INFORMATION
PLANNING I BUDGET
PERSONNEL
TAX POLICY
DEPUTY DIRECTOIl AFFIRMATIVE ACTION
ONBUDSMAN
SPECIAL SUPPOIlT ECONOMETRICS
INTERNAL AUDIT/
ANALYSIS AND
INVESTIGATIONS
r r I I
ASSIST DIRECTOIl ASSIST DIRECTOIl ASSIST DIRECTOIl ASSIST DIRECTOIl ASSIST DIRECTOIl
ADIlINISTRATIVE DATA PROPERTY VALUATION TAX TAXPAYER
SERVICES MANAGEMENT I EQUALIZATION ENFOIlCEMEMT SUPPOIlT
COMPTROLLER TAX PROCESSING
~ I- PROPERTY COLLECT IONS TAXPAYER INFO
~ VALUATION ~ l- I ASSISTANCE
PROCUREMENT/ SYSTEMS I
~ RECORDS I- PIlOOlIAIIIIING ACCOUNTS
fACILITIES MGllT ASSESSMENT SALES/ USE I- RECEIVAlILE
L- STANDARDS I- TAX AUDIT
I EQUALIZATION
TRAINING SYSTEMS
l- t- ENGINEERING LICENSE I
~ REGISTRATION
INDIVIOUAL
I- INCOME TAX AUDIT
HEARINGS DATA PROCESSING
l- t- OPERATIONS PENALTY
I- REVIEW
COIlPORATE
I- INCONE TAX AUDIT
TECHNICAL
I- BINGO ~ SUPPOIlT CONIIUNITY
I- ACTIVITIES/
PUBLICATIONS
INFORMATION
!- CENTER CENTRAL
I- INFORMATION
SERVICES
DATABASE
'-- APPLICATIONS TAXATION
I- SYSTEMS
SUPPORT
EXHIBIT 24
V4DOR- 2
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DOR - 82
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STATE OF ARIZONA
DEPARTMENT OF REVENUE
SPECIAL SUPPORT
PROPOSED ORGANIZATIONAL STRUCTURE
IJEPUTY DIRECTal
SECRETARY
Sl'ECIAL ! ilJ'PlJlT -
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IImNW. AFf_ nw: T~ T. AIIIITI AIlALYSIS
IoCTIC